A peek behind the News paywall
18Oct11

paywall“The ten year free trial is over” say the executives at News Ltd referring to plans to commence charging for digital subscriptions to The Australian.

The much anticipated move to paid digital subscriptions will take place in the next few weeks Richard Freudenstein, CEO of News Digital Media and The Australian, told a selection of bloggers last night.

Freudenstein was candid in his acknowledgement that this is a very necessary move for the organisation as the current model of free websites with display advertising is not enough to support quality journalism. When asked if this was a big risk they’re were taking, the general consensus at News was that it was a bigger risk not to try subscription. The current model just didn’t add up economically.

News will begin their subscription experiment with The Australian newspaper, the more “premium” of their daily news journals. Following the lead from The Times in England and the New York Times, The Australian will be serving up news content on a new website that leads to walled content. Headlines and the first two paragraphs will be viewable on the website but payment would be required to go further.

The key to success, News believe, will be the bundling of offerings. Pricing is anticipated to be:

  • Digital pass of $2.95/wk accessible across multiple platforms.
  • $4.50/wk for a digital pass & the Saturday Australian newspaper.
  • $7.95/wk for a digital pass & 6 day a week Australian newspaper.

At this stage News do not expect that this will be something to lure new readers to The Australian, but will appeal to a percentage of existing subscribers who they hope to migrate to the digital products.

They cite the experience of the music industry that moved from a pirated free period back to a paid digital product as evidence that people will favour convenience and reliability over free in the long run.

News also draw on their experience in another subscription model, Pay TV, where Foxtel took year to grow and become profitable but is now the most profitable TV model in Australia.

One suspects that if this gambit is to succeed that bundling of all of the News products will come into play. Foxtel, news press and niche publications could all be bundled for a larger, but more cost effective combined spend. Tellingly, News acknowledge that they now consider The Australian a “media franchise” rather than merely a newspaper and they are exploring how it will be utilised on “bigger screens”.

Of course there are plenty of cynics who believe that digital subscription will not succeed. One respected pundit I had breakfast with this morning scoffed at the plans to charge for The Australian online, adamant it would fail.

However News have done plenty of homework on this and feel they have no choice but to launch subscription models. They admit that they don’t have all the answers and the experiment will continually evolve. They have deep pockets and seem prepared to patiently see the industry follow suit and join them on the other side of the paywall.

News Ltd has launched a new website to take the discussion further. Read more and have your say at Future of Journalism

Other coverage of the #newsdigsub briefing at:

Servantofchaos

Ross Dawson

Mumbrella

Digital Tip

Personalize Media

Laurel Papworth

 

Posted under Digital, Press

Written by Craig Wilson