Online publishers suffered a less steep decline in revenue than feared at the height of the coronavirus lockdown, as surging demand for news drove up subscriber numbers.
Digital publishing revenue fell 14.3 per cent year on year to £96.6m in the second quarter — a smaller drop than anticipated.
The fall was driven by lower display advertising — the largest revenue category — as brands slashed their spend due to the economic downturn caused by Covid-19.
Revenue from smaller categories such as online video, sponsorship and recruitment also fell on the same period last year, according to new figures from the Association of Online Publishers (AOP) and Deloitte.
But the downturn was offset in part by a 45 per cent surge in subscription revenues to £34.5m, as homebound Brits turned to paywalled websites for the latest news about the crisis.
This marked an acceleration of an ongoing shift towards subscription services as news outlets look to reduce their reliance on advertising and encourage users to switch to a paid model.
Over the last 12 months subscription revenues have grown by more than a quarter.
The report also revealed rising optimism among online publishers following an initial collapse in sentiment following the virus outbreak earlier this year.
Publishers agreed that growing non-advertising revenue was a high priority, while a third of respondents also cited the need to expand their business through acquisition.
“A drop in digital publisher revenue was unfortunately inevitable in the second quarter given the Covid-19 pandemic and the impact of the associated national lockdown, but it is heartening to see the decline was not as steep as the industry initially feared, and that some revenue categories such as subscriptions continue to see strong growth,” said AOP managing director Richard Reeves.
“With another lockdown now in place publishers don’t have an easy road ahead, but these figures provide reassurance the industry is working together in a positive direction.”