Commentary

Trump Slump Hampers 'The Atlantic's' Revenue Goals

The Atlanticis said to be facing challenges in reaching a goal of doubling its subscription revenue from less than $25 million last year to $50 million, helping the publisher to turn a profit by 2023.

That target had appeared possible. Subscription revenue surged when people sought news and analysis of the COVID-19 pandemic and 2020 presidential election. As the health crisis subsides and President Trump no longer drives the news cycle with erratic tweets, The Atlantic has faced a slowdown in new subscriptions, NBC News reported.

To be profitable, The Atlantic would need to boost revenue to $110 million from about $75 million in both 2019 and 2020, CEO Nicholas Thompson said in a presentation obtained by NBC News. The publisher lost more than $20 million last year and estimated its loss this year will be $10 million.
Revenue from advertising, events and business-to-business activities was $50 million last year and will hit $60 million by 2023. That projection suggests a lackluster compound annual growth rate of about 6.3%, and pressures the company to find revenue from other sources such as subscriptions.
The current goal is to exceed $35 million in subscription revenue this year on the way to $50 million by 2023.
That target had seemed achievable when it added about 30,000 subscribers a month from March 2020 through January. New subscriptions reached 45,000 in both June and July, and peaked at 61,000 in September. That month, the magazine published a story citing unnamed sources who said Trump had called soldiers killed in action “losers” and “suckers.”

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Trump refuted the report, and The Atlantic basked in the publicity.

New subscriptions slowed to 10,000 a month by February, and its retention rate for existing subscribers is about 75% to 80%. As a result, its subscriber base is flattening or declining slightly.
The Atlantic could reach $50 million in different scenarios, such as 500,000 readers who pay $100 a year or 800,000 who pay $62.50, Thompson told NBC News. Among its 750,000 current subscribers, about 450,000 signed up for $50 digital access, while 300,000 pay about $35 to $40 a year for its print edition.
If The Atlantic seeks 1 million subscribers paying about $50 each, it will have to develop a strategy to reduce its churn rate. Alternatively, it is possible to raise its subscription fee, and perhaps sweeten the offer with access to virtual events or a membership that offers discounts and other perks.
In May, the pub named publishing veteran Andrea Valdez as senior vice president of audience strategy, a newly created role to focus on reader engagement. That strategy will be crucial to reaching the $50 million target in the next couple of years.
1 comment about "Trump Slump Hampers 'The Atlantic's' Revenue Goals".
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  1. James Smith from J. R. Smith Group, July 15, 2021 at 9:31 a.m.

    It sounds like the subscription targets were set by the CFO! Given the typical promotional rates offered by other print pubs, $50 seems pretty high. Countless research pieces in Media Post and elsewhere point to "price" as the key decision factor. Doesn't that  $50 narrow the target to upper income consumers?  Then too, there's the even higher price for a daily newspaper...which often isn't daily anymore. Does a two-legged print business model, subs+ads, even make sense anymore? 

    I often recall the phrase that went something like the railroads almost died because they viewed themselves as being in the railroad business and not the logistics/people mover business. 

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