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April 15, 2021, 10:27 a.m.
Business Models

Would you pay $34.99 a month to get news from Reuters.com? That’s their hope

Who deems Reuters.com so essential that they’ll pay more than two Netflixes a month for it?

Seven years after scrapping its plans to launch an ambitious consumer-facing product, Reuters Next, Reuters is trying again to expand beyond its wire service roots and make itself more of a news destination for “business professionals.”

The price for full access to the previously $0 Reuters.com will be $34.99 per month, after the currently free preview period, for a deeper level of coverage and data on industry verticals that include legal, sustainable business, healthcare and autos.” The homepage was switched over to a new, modular design as of Thursday morning (I noticed the changeover in the course of writing this article, when I headed to Reuters.com for the first time ever). An editor’s note says that a livestream, newsletters, and “the ability to follow our journalists and the stories they’re covering” (will they finally get bylines?) are on the way. “The Wire,” a feature that sorted Reuters’ most recent global headlines by time and was previously on the homepage, appears not to have come along for the redesign.

Who deems Reuters.com so essential that they’ll pay more than two Netflixes a month for it? In 2011, Ken Doctor wrote for us about the competition the news company faced as it tried to become better known in the consumer world:

Competition is all around, as other companies morph to meet similar challenges. There’s Bloomberg, whose hot breath Reuters can feel as the company aims to eat some of TR’s core business, with the Financial Times and News Corp’s Dow Jones taking more targeted aim, and The Economist, the Times, and AP all competing for differing parts of the business.

A decade later, Reuters faces more competition than ever. Bloomberg added a paywall in 2018 (also a decision that some found baffling) and currently charges $34.99 a month for a digital subscription, though hefty discount offers abound. The company expects to “approach” 400,000 consumer subscriptions this year, up from 250,000 in 2020. A lot of those subscriptions are probably expensed. Reuters, aiming at a professional audience, is also likely hoping that many subscribers won’t blink at sticking that $420 a year on their corporate cards.

While Reuters.com currently pulls in 41 million visitors a month, news isn’t parent company Thomson Reuters’ main revenue stream. The announcement comes days after Reuters named Alessandra Galloni its next editor-in-chief, the first woman to hold the role in Reuters’ 170-year history; at that time, Reuters reported:

Since 2008, Reuters has been part of Thomson Reuters Corp, a corporation with more-lucrative and faster-growing segments than news. Its chief executive, Steve Hasker, who joined Thomson Reuters last year, has focused on aggressively expanding the corporation’s three largest businesses: providing information, software and services to lawyers, corporations and the tax and accounting profession. Hasker’s strategy has helped boost Thomson Reuters stock to all-time highs.

Reuters News comprises about 10% of Thomson Reuters’ total $5.9 billion in revenues. Unlike many news organizations, Reuters is profitable. But it is also a drag on the parent company’s revenue growth and profit margin, analysts say, and the executive who runs the news business, Reuters President Michael Friedenberg, is pushing to increase sales and boost profitability. Looking forward, Thomson Reuters’ chief financial officer last month forecast that sales at its “Big Three” businesses are expected to grow 6% to 7% in 2023, while its news division and printing business “are expected to dilute organic revenue growth by about 1% to 2%.”

POSTED     April 15, 2021, 10:27 a.m.
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