How many subscriptions can you afford?

Would you pay to use Instagram and YouTube in the same way you pay for Netflix and… well, The New York Times?

eople like paying for news.” These are the first words from one of many, many articles that came out this month celebrating The New York Times’ subscription revenue growth. Forget the obvious mistake here of worshiping The New York Times because it runs its own role-playing (media) game, instead relish the real buffoonery: Do “people like paying for news?”.

Sorry to spoil your Hudson Sour, but it’s highly unlikely that people like paying for anything. Paying for things is like filing taxes or eating cauliflower: the fact that we do it doesn’t mean that we find any pleasure in it.

Today, media is spellbound by the supernatural powers of the subscription model. “Here comes a new game service,” “Hulu is going to be huge,” “MoviePass is the next big thing,” “ESPN is joining the game”… and these are just a few results from a lazy two-day data collection.

Honestly, how many subscriptions do they believe we can afford?

Although that’s a rhetorical question, it’s related to two other non-rhetorical issues: 1) what would happen if YouTube, Facebook, Instagram and the whole troop decided to join the subscription party? (I’m aware of YouTube Red, we’ll get to that) and 2) based on their hypothetical price range, would we all discover that we are already paying too much or too little for our usual media services?

Two of the most popular services out there — Netflix and Spotify — come with similar price tags: $10.99 and $9.99. The most flagrant difference is that Netflix subscribers spend on average 1h36m/day using the service, while Spotify folks spend less than half of that: 44 minutes. Since apparently we’re living The New York Times appreciation day(s), let’s take a look: $20/month for digital access, crossword puzzles and recipes, which means I honestly hope their readers devote more than 1h30m each day reading the news (or doing the crossword at the very least).

This is the exact moment that your MBA diploma may deceive you with a package full of buzzwords: “target audience,” “recurring pull payments,” “free trials,” “get customers in the door”… yeah, I know… you and I can do this all day long. But this is not some strategic-guide-to-boost-your-business, quite the opposite, we’re simply debunking how weak (or thought-out) some of the current subscription models are built.

Facebook, YouTube, and Instagram are three of the most time-consuming tools of our time — all of them being free of charge, and all of them fueled by the same advertising model that once provided comfort and reassurance to news media companies. What if these three iconic services required a monthly payment starting tomorrow? How much would each one cost? Would you pay for them? And most importantly, could this kind of change harm other companies, such as Netflix, Spotify and … The New York Times?

Sorry, but you can not "click the banner above to sign up for free"

Since it’s impossible to know how many users would instantly ditch Facebook or how many would sacrifice Instagram (so they could pay for YouTube), it seems more effective to venture a guess about theoretical price charts. (Keep in mind that pretty much everything in this business is theoretical. Though most of the following statistics are provided by the companies themselves, it is difficult to know who’s telling the truth — which is a bummer).

We do know that people spend a lot of time on Facebook, YouTube, and Instagram, but “a lot” is boringly vague, so let’s dig deeper. In 2016, Facebook revealed that “users spend more than 50 minutes a day” across its suite of apps (including Instagram and Messenger, but not WhatsApp). Last month, we learned that Facebook-only average time is about 25 minutes/day. Based on Snapchat numbers (also 25 minutes/day), it is safe to assume Instagram has a similar index: 20–25 minutes/day.

YouTube is a different story — it has won a bet with Satan. Last June, the company announced that each one of its 1.5 billion users watch an average of one hour per day — on mobile alone.

Even if all those numbers above don’t match reality, they provide the opportunity to play around with this chart:

Exhibit A: by the end of the 30 days, your minute-of-fun watching Netflix ($0.0038/min) is much cheaper than your minute-of-fun listening to Spotify ($0.0075/min) — half the price to be precise — if you pay for Spotify, of course. Exhibit B: if the other three characters decided to embrace the subscription model, they would probably have to find a figure closer to $0.0038/min to trigger some media chaos — say, a half cent ($0.005).

Using this fictional formula ($0.005 x minutes/month), YouTube would cost $9 a month, while Instagram and Facebook could charge users $3.75 monthly.

I know, I know — none of these measures are underpinned with scientific facts and this is not a direct correlation — you can pay, for example, $50 a month for all the traditional Adobe apps and never use them (been there, done that) or you can drop $75 every month on that hipster gym membership of yours and it will probably give you more pain than pleasure (like cauliflower).

However, this exercise of imagination reveals some of the conflicts that news media industry may have about the digital subscription model. The New York Times, for example, believes $20/month is a fair price for its services, The Wall Street Journal, on the other hand, has estimated its monthly fee at $18.50, while Jessica Levin’s, The Information (which you can read about here) raised the bar to $40/month. I’m 110 percent positive that all of them could spend more time justifying their figures than you and I spend on Netflix, so their price is right, right?

Probably not. Some may find it too low — those guys from Axios and their $10,000 dream would make a fine example — and some might find it too much: Wired magazine has just raised its paywall and their price is nuts. You get all digital access and the printed edition of Wired for $20/year (which is equivalent to $1,66/month).

YouTube Red: it looks like Netflix and that's not a coincidence

One of the biggest differences between the subscription club (Netflix, Spotify and The New York Times) and the free club (Instagram, YouTube, and Facebook) is the fact that the former produces or buys its content while the latter offers user-generated content. That’s also one of the reasons that the free folks are comfortable with their massive earns in advertising and able to leave your credit card alone … for now.

YouTube Red is the most prominent example that these lines can blur rapidly. Red is a paid streaming subscription service, available in five countries, that offers not only ad-free YouTube regular videos but also unlimited music and some original series and movies — for $10/month. YouTube’s plans consist of expanding the service to more than 100 countries and premiering a mix of new “TV” series in 2018, including “The Karate Kid” reloaded.

Unsurprisingly, this is the same path that Apple intends to follow this year. The company set apart $1 billion to produce original content — which includes a Spielberg production and a new show starring Jennifer Aniston — that will either be bundled with Apple Music or — worse (for us) — offered on a new internet TV service (that will require a few extra bucks).

Although these comparisons may seem fanciful right now, it would be pertinent to realize that the one major thing all these media companies have in common is you. Netflix, Facebook, YouTube, Spotify, Instagram, Hulu, ESPN, and even The New York Times fiercely fight for the free minutes of your day, which are limited, by the way. But one thing is to fight for your time and another, totally different, is to fight for your wallet.

People like paying for news? I have no idea what compelled someone to write that other than drug abuse, but this is the type of statement that only confirms the following: News publishers definitely have no clue where they’re getting into.

Two decades of hardcore journalism in a past life; now Digital Media PhD candidate @ University of Porto, coffee taster and vinyl aficionado

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