After failing in its first attempt to expand beyond its wire service roots with its consumer facing, Reuters Next, Reuters announced this week that it’s making its Reuters.com a destination site for “business professionals” behind a paywall.
Until now, Reuters.com cost $0 to reach directly or via Google or a RSS feed. The new cost is $34.99 a month for a deeper level of coverage for industry verticals including healthcare, autos, sustainable business, and, of course, legal.
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.
But while Reuters.com pulls in 41 million visitors a month, news isn’t the parent company Thomson Reuters’ main revenue stream.
Alessandra Galloni, its next editor-in-chief 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%.”
The legal vertical is unique, to say the least. The profession, as a whole, is willing to overpay for an under-delivering product.
Most lawyers and law firms are not overly familiar with technology and innovation, especially when it is delivered in an a unstructured and open fashion.
The vast majority of lawyers don’t know how to retrieve and read open source news via a news aggregator, Twitter or directly from blogs.
Such sources cover more niches in more detail and with more authoritative reporters/writers than Reuter.
With an expense account, Lawyers may pay a subscription from a news source whose articles may even be included in another aggregated news service.
Thomson Reuters has all the data in the world to back this up – and knows that a lot of lawyers armed with an expense account will pay $420 a year for another email news feed.
The day will come though that legal news and commentary, via blogs, aggregated and curated, will be open and free.