> The Observer launched its first-ever digital subscription in November 2025 at £16 a month or £144 a year, with a single umbrella tier covering print, digital, audio and Culture Club benefits from spring this year.
> Culture Club, a set of arts and culture perks worth more than £800, is given to every subscriber instead of being held back for a premium tier.
> Early data shows subscribers who engage with multiple parts of the product, from Nigel Slater's recipes to the puzzles to podcasts, are significantly less likely to cancel.
> The Salt Path investigation and its podcast and documentary afterlife have been the single biggest growth catalyst since launch.

Lessons:
> A single, transparent subscription can beat early tiering when you are reintroducing a brand to its audience.
> Retention comes from breadth of engagement across a product, not from any one flagship story.
> Old brand equity can bridge readers into new daily habits, but only if the product is built to earn that habit.

Why there are no tiers

Where many publishers reach for tiers early, The Observer launched with a single umbrella subscription covering print, digital, audio and now, Culture Club (see below). “We wanted the subscription to be simple to understand, great value for money and comprehensive,” Riley says. Reintroducing a heritage brand to an audience that may not be familiar with it, or has never encountered it digitally at all, is not the moment to ask people to choose between packages.

A separate audio-only subscription, a legacy of the Tortoise audio model, exists through Apple Podcasts and Spotify for readers who want nothing else, and there is real cross-pollination between formats. But the umbrella model is deliberate: with only six months of data, Riley says tiering decisions now would rest on very little evidence. Simplicity was the safer bet, leaving room to see where the value lands before carving up the product.

Culture Club, for every subscriber

The Observer’s most visible product launch since the initial rollout is Culture Club, a set of arts and culture benefits bundled into every subscription: two-for-one tickets to the National Gallery, exclusive cinema screenings with directors, author events and book clubs held in the newsroom, and discounted theatre tickets. “It’s your cultural life, curated,” is how Riley describes it.

Rather than a separate product built for a distinct audience, Culture Club is included in the standard subscription and goes to every reader who pays for it, with no separate tier. Riley frames it as adding significant partner benefits to those that The Observer was already quietly offering, like giving a 70% discount on home cinema memberships through their partner MUBI and turning them into a coherent proposition tied to the brand’s editorial identity. Arts and culture were the deliberate focus rather than, say, food or travel: Riley sees it as a standout interest for Observer audiences that other subscription products in the market have overlooked. The commercial logic is retention as much as acquisition: subscribers who attend an event or use a benefit build a tangible relationship with the brand that a login alone cannot create.

Riley traces the conviction to the i newspaper, where he launched reader events and saw that most people find news organisations distant and faintly mysterious right up until they are sitting in a room talking to a journalist. Subscribers who have had that kind of experience with a brand, in his experience, are simply more likely to stay, which is the logic Culture Club now builds into the subscription itself.

Pricing without the tricks

The Observer priced its subscription at £16 a month or £144 a year, deliberately avoiding 99p-style pricing. “That was part of just trying to be really clear about what we think the value is of the work that we’re doing,” Riley says. An under-35 price point at 50% off acknowledges that younger readers are often priced out of premium subscriptions, with 35 chosen as a deliberate life-stage threshold.

The Observer has no obvious competitor to benchmark against. The Guardian’s UK voluntary model and the Times’ hard paywall represent decades of pricing evolution aimed largely at winning back or re-engaging audiences a mature business has already exhausted. The Observer has no such legacy to correct for, which Riley treats as an advantage: the headline price can reflect where the business is now, without unwinding years of promotional pricing.

What’s driving retention

Six months in, Riley says the clearest signal in the data is breadth of engagement. Subscribers who touch multiple parts of the product, reading Nigel Slater’s recipes, doing the crossword and listening to a podcast, are significantly less likely to cancel than those who arrived for one thing and never explored further. Because the product is still young, many subscribers do not yet know everything they have access to.

That is why subscriber messaging pushes Culture Club so hard: highlighting more than £800 in available benefits is a fast way to demonstrate value to someone who subscribed for a single podcast series before they reach a cancellation decision. The Observer has also seen a healthier-than-expected skew towards annual plans, which Riley reads as an early show of faith, buying time to build a relationship before the first renewal.

The Salt Path’s second life

The Chloe Hadjimatheou investigation into the bestselling memoir The Salt Path was a hit before the subscription even existed, driving millions of readers to the open-access site last summer and helping build the registration base the launch depended on. In January, a narrative podcast series built on the investigation became, in Riley’s words, the biggest catalyst for subscriber growth in the first few months after launch, driving uptake in both the standalone audio subscription and the full subscription that includes it. A Sky documentary over Christmas had extended the story’s reach further. A new Hadjimatheou series, We Call Her Emma, has just been released, an investigation focusing on the extraordinary rise of Asma al-Assad from West London girl to the heart of Syria’s brutal dictatorship: the next test of whether a story that brings subscribers in at scale can hand them on to the rest of the product.

Building fast without the legacy costs

The Observer’s product team has moved almost entirely to an agentic coding approach, using AI tools to handle the bulk of feature development. A small team of engineers from an outside agency works alongside an in-house tech lead and product manager. Claude writes most of the code for new features, while the engineers concentrate on harder technical problems and on testing and quality assurance, checking that the output does what it was meant to. The approach lets a young, lean organisation compete with newsrooms that have far larger legacy technology teams, freeing more of the business’s resources for journalism itself.

Riley applies the same instinct himself. After seeing a story-support widget demonstrated by a US publishers’ collective at the recent Audiencers Festival in London, he built a rough version of it within an afternoon, not to launch it but to show his own team the idea. Prototyping, he says, has become quick enough that showing is often faster than telling.

On the harder question of AI companies and publisher content, Riley is careful not to stake out a fixed position. The Observer has partnered with Particle News, an AI-powered aggregation app, as its first UK publisher, and Riley points to Reuters Institute research showing a growing share of global news journeys now beginning inside a chatbot as a signal publishers cannot ignore, whatever position they eventually take on direct deals versus industry coalitions.

The hardest part isn’t the technology

Asked what has been harder than expected, Riley doesn’t hesitate: discipline. A brand this old, with this much editorial breadth, invites endless extensions: more tiers, more products, more features, especially now that the barrier to building any of them has collapsed.

“When Claude can build you a recipe site in an afternoon, you have to ask yourself: is that really what we want to build?”

Riley has previously cited The Atlantic’s decade-long path to a million subscribers as a realistic model for the kind of timeline this takes. His ambition for The Observer is to build a sustainably profitable media business on reader revenue and other income streams, and he argues that doing so without the legacy cost base of an older company changes the calculation. He won’t share subscriber numbers this early. Six months in, he says, The Observer is on track. There is, by his own admission, still a long way to go.

Jack Riley is Chief Customer Officer at The Observer, where he leads customer revenue strategy across subscription growth, marketing, data and product. He joined in 2025 from The London Standard, where he was Chief Digital Officer, and previously led Huffington Post’s turnaround to profitability as Managing Director. The Observer is owned by Tortoise Media.

> The Sun launched Sun Club in 2025 as a £1.99 freemium membership, layering subscription revenue and first-party reader data on top of an already large free audience

> A year in, 65% of members are women, and TikTok has opened a genuinely new audience: those subscribers are 85% female and 15 years younger than the average member

> First-week app activity is the strongest predictor of long-term retention. The most loyal members read over 100 articles a week, almost entirely in the app

Lessons:
> Value-driven perks are the core of the proposition, and for this audience they're the retention tool that matters

> Freemium can serve advertising and subscription goals at once, because a known, logged-in audience strengthens both

FIPP's latest data shows a digital subscription market growing 24.7% and concentrating fast. The winners are bundling, embedding, and reducing their dependence on search. The losers are still renting their audiences from Google.

The Nordics settled this argument years ago

While publishers in the US and UK are still debating the merits of bundling, Norway’s Amedia has been running the experiment since 2020, and the results are stark.

Its +Alt bundle, which gives subscribers access to all 127 of Amedia’s local newspapers plus a sports streaming service, now has 433,000 digital-only subscribers. Churn on the bundle runs at 0.7%. Churn for a single-title subscription is 16.4%. That difference translates into a subscriber lifetime value that is 26 times higher for the bundled product.

Norway, as a subscription market, grew 55.56% in the period, a function of a deliberate structural choice. Publishers there decided early that local relevance and shared digital infrastructure were not in tension; they were complementary.

In Sweden, Bonnier News reached the same conclusion. Its +Allt bundle, combining national titles (Dagens Nyheter, Expressen), more than 40 local newspapers and magazine content into a single subscription, reached nearly 500,000 digital subscribers by the end of 2025, up from around 270,000 in mid-2024. Including print subscribers with bundled access, total reach is over 1.1 million.

Germany and France are also moving. Germany’s subscription market grew 35.83% in the period, the fastest of any major European market. France grew 31.21%. Both reflect the same underlying pattern: publishers deepening their product propositions and reducing their exposure to external distribution.

The UK is following. FIPP’s data shows the market up 22.61%, with Newsquest, DC Thomson and Mail+ among the standout performers on percentage growth. Mail+ grew 177.8% in the period, from a low base, but the direction is clear.

AI search didn’t break the business model. It revealed which models were already broken

The useful question is not whether AI search hurts publishers. It is which publishers. The FIPP data, read against recent industry reporting, makes the divide specific.

The content most exposed to AI overviews is the content most easily summarised in a sentence: car specifications, factual service journalism, commodity news. Bauer Media Group has said as much directly. When the overview answers the question, the click never happens, and the publisher’s role in the value chain ends with the model’s training set.

The content least exposed is reporting that does not compress. Analysis, investigation, distinctive voice, and depth all convey information that survives summarisation, because the value lies in the framing rather than the facts. The Telegraph’s SEO director has described search as being in “managed decline” rather than collapse, on the grounds that subscribers return for reporting summaries that cannot be replicated elsewhere. The framing fits the data.

The more interesting signal sits in the other direction. The Washington Post reports that readers arriving via large language models spend longer on the site and convert to subscriptions at higher rates than traditional search visitors. The volumes are small, but conversion quality matters: AI search may be filtering out low-intent traffic that inflated publisher metrics without ever converting into subscribers.

As Colin Nagy argued recently in Monocle, AI hasn’t created a new problem for publishing; it has clarified an old one. Publishers built around search traffic were never really building audiences; they were borrowing them, and the loan is now being called in. The publishers losing ground are not victims of a new technology. They are tenants whose landlord has changed the terms.

US local publishers are paying it

Lee Enterprises reported that its digital subscriber base fell from 728,000 in March 2025 to 609,000 by December: a loss of 119,000 in nine months. The USA Today Co, formerly Gannett, saw a 26% decline year-on-year, dropping from 1.95 million subscribers to 1.45 million.

Both companies attribute the declines to deliberate strategies focused on price optimisation and improving average revenue per user. That may be true. It also describes companies managing contraction rather than building growth.

The sharpest contrast sits within the same corporate structure. Newsquest, the USA Today Co’s UK division, grew digital subscribers 35% year-on-year to 139,000 over the same period. Same parent company, opposite trajectory.

What the winners have in common

Bloomberg grew subscription revenue 10% in 2025, taking paying subscribers beyond 707,000. It now produces 800 hours of video each month. Subscriber-only newsletters grew 20% year-on-year. Podcast downloads rose 26%. The pattern is consistent: more reasons to open the product, more often.

Substack, with five million paying subscribers, has built its growth engine around internal recommendations that move readers between newsletters inside the platform. It is less a publishing platform than a subscription marketplace, one that reduces its dependence on external traffic by creating its own internal referral economy.

Immediate Media, with 767,000 digital app subscriptions now accounting for 64% of group subscriptions, is using AI to identify which audiences are most likely to subscribe and when engagement signals are strongest. The objective is habitual use and longer subscriber lifetime value.

The thread connecting all of them is the same one running through the Nordic data, the NYT bundle strategy, and the divergence between US and European local publishers. Subscriptions built on borrowed traffic are fragile in ways that subscriptions built on daily habit, multiple products and direct relationships are not.

Growth in the market is concentrating around publishers who solved for retention before they needed to.

We interviewed Johannes Vogel, Chief Product & Revenue Officer at stern (published by RTL Deutschland) about how they relaunched a subscription offering from scratch, with teams & systems designed for digital reader revenue.

TL;DR
- The product & revenue team grew from 7 to 75 people, with early hires focused on product, data, engineering and Ad-/Affiliate and Subscription marketing
- Moving from monthly to weekly pricing lifted conversion, particularly among readers with less prior brand engagement; the app stores were reverted to monthly after weekly renewal prompts created friction
- GEO and Capital perform particularly well on both conversion and retention, with brand profiles addressing very specific user needs

Key lessons:
- For a general interest publisher, personalisation is not a feature — it will be the product
- The article that converts is not always the one that retains. Content consistency matters more than acquisition volume
- Get editorial positioning right before optimising conversion. The funnel cannot compensate for a weak proposition

TL;DR
-> Mediahuis has built an 'essential subscription' bundling journalism with hiking apps, e-books, masterclasses and the New York Times

-> The bundle is structured around three layers — Inform, Guide and Enable — tailored by brand rather than by individual subscriber

-> Its 777 strategy aims for 70% of operational margins to be from digital by 2030, using the bundle to drive both volume growth and tier migration

-> 170,000 subscribers activated RouteYou; activated users show 26.5% lower churn, and subscribers log in 2.4–3.0 times per month on average

Key lessons: 
-> Stay within one degree of separation from journalism
-> Services that require a bigger conceptual leap tend not to stick

• The New York Times partnership sits alongside the premium titles — NRC in the Netherlands, De Standaard in Belgium, and the Luxembourg brands — where an internationally minded readership sees a natural connection.
• E-books are offered more broadly, with selections varying by brand.
• RouteYou has been rolled out for all titles, but is particularly successful in regional and Belgian brands with strong outdoor and weekend-lifestyle content, where a survey of more than 10,000 subscribers had already shown that 24% wanted a hiking and biking app as part of their bundle.

“Different bundles work better for different brands,’ van de Peppel explains. ‘We try to tailor it really around the brand and make those choices which make sense to the brand.“

The RouteYou acquisition

RouteYou is a Belgian company used by more than 15 million outdoor enthusiasts, with its strongest presence in the Netherlands and Belgium. Since the Mediahuis acquisition in 2023, coverage has expanded into the Irish, Luxembourg, and German markets, where the publisher’s titles already have deep roots. It competes in the same space as Strava, but with a distinctly local character and established relationships with regional tourism boards.

Mediahuis’s regional titles had long published hiking and biking content, especially in weekend editions, but the next step was always missing: readers could learn about a trail, but had nowhere to go from there. Now, a QR code in the article links directly to the route in the RouteYou app. ‘It’s a strong connection with the editorial rooms,’ van de Peppel says. “You can really make a direct connection between the content and then going out and doing something with it.’

The acquisition was not conceived purely as a bundle enhancement — Mediahuis bought a standalone business, intending to develop both sides of the business. Since then, investment in a native app and an expanded RouteYou team has driven +98% growth in standalone subscribers in 2025. 

When RouteYou access was extended to over a million Mediahuis subscribers, it immediately dwarfed the app’s existing standalone user base. Those who came through the news bundle were subscribing to journalism; the outdoor features are a welcome addition rather than the draw.

What the numbers show

The activation numbers tell part of the story. The retention numbers tell the more important one. Mediahuis tracks whether subscribers who have activated RouteYou behave differently from those who have not, and they do. 

Over a 12-week period, subscribers who had activated RouteYou were significantly more likely to remain subscribers at the end. For every 100 who had not activated, 4 had churned. For every 100 who had, fewer than 3 had churned. At the scale Mediahuis operates, that difference compounds quickly.

The perception data reinforces this. 

• Among all Mediahuis subscribers, around 52% consider RouteYou a valuable addition. 
• Among those who have actually used it, that figure rises to 82%. 

The gap between the two numbers is the central challenge: the product works, but only once subscribers try it. Getting them to that first experience is where most of the activation effort goes. Mediahuis offered exclusive webinars to help subscribers get started; 12% of readers attended, and 54% of those participants were already Mediahuis readers who engaged with the outdoor content in their titles.

Sustained usage backs up the initial activation picture. Active users log in 2.4 to 3.0 times per month on average, with 15% opening the app at least once a week, numbers that predictably spike in the spring and summer hiking season. In total, 49% of eligible Mediahuis subscribers used RouteYou at least once in the past year.

Mediahuis has been drawing lessons from the New York Times, whose bundle is a well-documented case study in how added services drive both retention and revenue per subscriber. ‘They see strong effects on retention and ARPU when people start using more services, van de Peppel says. “We are seeing the same thing, which is really encouraging.’

The 777 strategy

The essential subscription is the commercial engine behind Mediahuis’s 777 strategy: shifting 70% of operational margins to digital by 2030. Currently, the balance runs roughly the other way, at around 60% print and 40% digital.

Van de Peppel frames the mechanism plainly: it works on both Q and P, quantity and price. A more compelling subscription drives digital subscriber growth. And because most additional services are only available in the full premium subscription — not the basic tier — the bundle creates structural upward pressure on ARPU. The full subscription costs roughly twice as much as the basic tier, and as the bundle becomes more valuable, more subscribers opt for the full tier, either at sign-up or by upgrading.

‘We also see a shift from the basic subscription to the full subscription,’ van de Peppel explains. ‘Which in the end means they pay a higher price. We increase value, but of course, the value coming back is also higher.’ Volume growth and tier migration together are designed to get digital subscriptions generating the margins that print once did, and within a seven-year window.

Advice for publishers considering a similar path

Van de Peppel’s guiding principle is staying within ‘one degree of separation’ from core journalism, adding only services that connect naturally with what the newsroom already produces:

• The New York Times partnership works because Mediahuis titles already cover international affairs.
• E-books work because those titles are already reviewing books.
• RouteYou works because brands have always written about the outdoors — and the data already showed subscribers wanted it.

Where the connection has to be invented, it tends not to stick. Van de Peppel’s advice to other publishers is simple: don’t stray too far from what your newsroom already does well.

The lesson he returns to most on RouteYou is editorial embrace. Newsrooms are independent — there is no guarantee journalists will link content to the app. Where they do, the activation numbers bear it out: Belgium, with the strongest editorial collaboration, hit nearly 30% activation, compared with a portfolio average of 1 in 5. The success of RouteYou’s adoption really depends on editorial collaboration.

Van de Peppel’s target is for at least 70% of digital subscribers to regularly use at least one additional service, weekly or monthly. ‘We launched a lot last year. This year, we won’t launch as much. We will focus on what we have and really make it work.’

John Rahim is founder of The Media Stack, a newsletter delivering in-depth analysis of the advertising, media, and marketing technology sectors, with a focus on emerging trends in AI and monetization.

In this article, John shares his interview with Joshi Herrmann, founder of The Mill, a UK-based digital publisher known for its award-winning, high-quality local news newsletters. They discuss what an "overwhelmingly reader-driven" revenue strategy means for their business:
-> Cities are chosen based on having the right person to pioneer the launch. Herrmann looks for someone who loves their city and believes in narrative journalism
-> Funds, when needed, have been from individuals who care about journalism, not firms with processes and exit timelines
-> The company has a model that prioritizes readers over traffic and quality over volume

By 2020, the infrastructure was in place to try something different. Substack had shown individual creators could build businesses charging for content. Tony Mecia was running a successful local business newsletter on the platform in Charlotte, North Carolina called The Charlotte Ledger.

“I thought, well, it is a different market, he’s operating in a much more affluent area than Manchester—but this might be worth a go.”

Herrmann had no money for a big team. That constraint became an advantage. He’d launch a newsletter, keep costs low, and focus on quality over volume. He set the price at roughly double what most Substack newsletters charged, betting readers would value proper local journalism enough to pay for it.

They did.

The numbers

Mill Media now operates in Manchester, Sheffield, Liverpool, Birmingham, London, and Glasgow. About 175,000 people are on free email lists. 13,000 paying subscribers.

The original Mill in Manchester has 4,000 paying subscribers. The Sheffield Tribune has 3,000. Liverpool Post has 2,000. Newer titles are growing.

Revenue is overwhelmingly reader-driven. Advertising accounts for about 5% – high-quality sponsorships with the FT, Royal Horticultural Society, and Manchester Museum. Herrmann wants to grow that to maybe 20% for diversification, but the core model stays reader-funded.

“If you’re reader-funded, your incentive is to give quality to those readers,” he says. “We’ve got to maintain that.”

The company moved from Substack to Ghost, cutting platform costs to less than a fifth of what they had been paying while gaining greater control over design. “It’s a lot cheaper… it allows us to experiment.”

How to pick a city

There’s no spreadsheet. Herrmann doesn’t analyse demographics or run market sizing models. He looks for someone who loves their city and believes in narrative journalism.

“The most important determinant is the person in the city who wants to do it.”

The Bell in Glasgow happened because Robbie Armstrong got in touch, they met for a drink, and Herrmann recognised someone with encyclopaedic knowledge of the city and genuine passion for quality work. “At the beginning, when it’s difficult, and it’s a real battle, and you have almost no money, and it’s a real risk, you need that first person who is a pioneering person.”

Cities with universities help. Strong local identity distinct from London helps. But the human element matters most. “If someone came along in a city that I really loved, and I had the right person, I’d probably go for that over not the right person in a very large city.”

Individual backers, not VCs

Herrmann raised funding from people, not funds. Mark Thompson, former CEO of the New York Times and current CEO of CNN, Nick Johnston from Axios and Investor Turi Munthe.

They’re individuals who care about journalism, not firms with processes and exit timelines.

“The conversations I had with those people were no different from the conversation I’ve had with other journalists”, Herrmann says. “Someone who cares about journalism asks a bunch of questions for 45 minutes, and then I say at the end, would you throw in a bit of cash?”

They provide advice when Herrmann asks for it. They don’t interfere with editorial. “Fundamentally, you can take all the advice you want, but you have to go with your gut. The mistakes are mine, and the decisions are mine.” The investors share Herrmann’s view that journalism must be commercially sustainable.

“The only genuine solution to the journalism problems that we have is via commercial sustainability.”

City by city profitability

Each city aims to break even within two to three years. Manchester and Sheffield are already profitable. Liverpool and Birmingham should hit profitability this year. London by year’s end. Glasgow early next year.

“I don’t expect us to be the most profitable company in the UK, but I expect us to cover our costs in our cities after a couple of years,” Herrmann says. “Otherwise, you’re creating some sort of vanity project. I’m not interested in that.”

When The Bell launched in Glasgow, journalists at traditional Scottish newspapers weren’t thrilled. They felt they were doing quality work but were stuck writing 14 stories a day to feed the traffic machine. Herrmann’s not criticising the journalists.

“It’s not the quality of the journalists. It’s not about their effort. It’s about the fact that the people who make decisions in these newsrooms have made bad strategic business decisions that have led them to a model that means these young journalists have to write 14 stories in a day.”

What works

Mill Media now employs 22 people and is growing. The company has a model that prioritises readers over traffic and quality over volume.

“We’re trying to introduce a way of people valuing high-quality local journalism in a way that hasn’t been there in the culture before,” Herrmann says. It’s not easy. It requires exceptional journalism every day, smart promotion, and relentless focus on basics. But the growth is real. From one person during lockdown to a multi-city operation, backed by media veterans and sustainable economics in each market.

Regional journalism’s problems were never about reader appetite. They focused on business models chasing the wrong revenue. Herrmann’s success is the proof. The question for Britain’s struggling regional newspaper groups isn’t whether this model works. It’s whether they have the appetite to execute it.