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AOP: Video and subscriptions to power the future of premium content

The latest Digital Publishers Revenue Index (DPRI), a quarterly report on UK publishing from the Association for Online Publishing and Deloitte, highlights strong video, subscription and sponsorship revenue growth; indicating a more diverse path for sustainably supporting premium content.

AOP: Video and subscriptions to power the future of premium content

According to the DPRI report, Q2 2017 was a tough quarter (-6.4% vs Q2 2016) for premium publishers – reflecting the picture in the wider advertising sector. A key factor in this performance was the fact that only one third (32%) of publishers reported growth in Q2 2017.

Despite the conditions in Q2, across the 12 months to June 2017 the DPRI grew by 1.4%. This annual growth was driven by healthy growth in sponsorship (+19%), subscriptions (+15%), and video (+75%).

Sponsorship revenue actually declined year-on-year on desktop but grew significantly on mobile devices where screen size lends itself to this creative format and approach.

With revenue from forward-focused formats such as video and mobile rising, in addition to increasing subscription-based funding, it seems a breadth of revenue channels will be key for publishers to achieve sustainable monetisation, says the AOP.

Richard Reeves, Managing Director, AOP, commented: “This research has put a spotlight on the way publishers are adapting their growth priorities to keep pace with industry innovation. Content producers are retaining a focus on key advertising areas, such as mobile and video, but also expanding their revenue generation strategy by developing areas such as sponsorship and subscriptions. This demonstrates that despite a challenging quarter which has seen AOP board member sentiment about future performance drop by 32% in these three months - publishers have the tenacity and foresight to ensure continued success.”

Dan Ison, lead partner for media and entertainment at Deloitte, commented: "Despite macroeconomic uncertainty leading to a fall in confidence, the UK’s publishers should be pleased with their ability to adapt to changing consumer behaviour. Smartphone digital advertising alone has seen quarterly revenue growth increase by 42% since Q2 2016, illustrating that publishers are successfully monetising from smaller screens. This change in strategic focus is important, particularly when considering that 85% of 16-75 year-olds – around 41 million people in the UK – now own or have access to a smartphone.”