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