In October 2011 the executives at News Ltd announced that “the ten year free trial is over” and they were launching digital subscriptions for some of their publications beginning with The Australian.
Naturally, they were plenty of cynics prepared to predict the pay wall gambit would fail, and I certainly had my doubts. Its still only very early days and long term success is far from assured but News Ltd have just released their first round of figures for digital subscription. They appear to be very encouraging.
Here’s the announcement:
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:
I can’t help thinking that what is happening with Wikileaks and the strident opposition Julian Assange and his cohorts are enduring from governments around the world is a significant moment in history.
While the traditional press have been fretting about copyright and free distribution affecting their business models a much bigger threat has been bubbling up via the Wikileaks model.
It seems to me that Wikileaks is to journalism what Napster was to the music industry.
Sure, Napster was shutdown, but only after interrupting an entire industry and spawning many copycats, some of whom still exist today. The damage was done and the music industry will never be the same again. Out of the ashes rose legitimate business models for easily buying music online, such as iTunes.
A PricewaterhouseCoopers (PwC) report issued yesterday in the USA claims that the internet is poised to overtake newspapers as the second largest U.S. advertising medium by revenue behind television.
This is a significant moment in advertising as traditional media have steadily been overtaken by the Internet in less than 20 years. How long until Internet advertising rolls past Television? And here in Australia, how long until the Internet becomes the number two advertising medium?
Here is the story in full from The Australian….
A very familiar scenario could be about to play out.
A decade ago the music industry was reeling from the sudden loss of revenue thanks to the likes of Napster and other peer-to-peer networks. Free downloads were “robbing” music publishers of sales. They got aggressive, sued individuals for downloading and chased Napster into oblivion but the fact remained that the music industry hadn’t kept up wit the changing digital landscape and didn’t have a model for the 21st Century.
Then along came Apple with the iPod and the iTunes store. They made it easy, legal and affordable to download music and quickly struck deals with almost every music publisher. A new model was created. It wasn’t necessarily as lucrative for the publishers but it kept them alive and in the game.
The Austereo duo of Hamish and Andy dominated the Australian Commercial Radio Awards in a ceremony which snubbed stablemate The Kyle & Jackie O Show despite it having previously had a strong presence on the shortlist.
The shortlist had been drawn up prior to the scandal of Kyle & Jackie O’s notorious lie detector segment, while the final round of judging coincided with the furore.
Hamish & Andy won the top prize of best on air team along with best networked program, best station promotion, and best multimedia execution. The show’s Sam Kavanagh won best show producer.
Meanwhile, 2GB’s Ray Hadley won three awards.
WINNERS (Section winners are labelled as Country, Provincial, Non Metropolitan and Metropolitan):
Last week Australian News Ltd supremo John Hartigan stirred up every media blogger in the Southern Hemisphere with a speech to the National Press Club. Hartigan took a swipe at bloggers as well as new media sites like Mumbrella and Crikey.
He also toed the company line that we will all be happily paying for news online soon due to the quality of the journalism (which was no doubt aided by the typo in his own paper).
Naturally the blogosphere were up in arms and Mumbrella received a gazillion comments helpfully pointing out that Harto had missed the point and, as @NickHaC so eloquently put it, “you will miss us when we are gone has never been a compelling business model”.
Anyway it occurred to me that this whole episode highlights both the shortcomings and potential solution to the online press predicament. Hartigan is seemingly trying to alienate the blogosphere yet generated substantial links and coverage online with his spray. Why not use the blogosphere (and Twitterverse) to your advantage?
Embrace the blogosphere!
This commentary is the modified text of a speech given to the Insight Exchange’s Twitter’s Impact on Media & Journalism event in June 2009.
In my daily professional life, I often feel as though I am a medieval knight who has been called into action to defend with sword and shield the honour of a great lady of noble birth.
That lady’s name, of course, is Journalism.
Now, there is no doubt that she is currently beset on all sides.
Her bountiful wealth of gold and silver is speedily disappearing as digital mediums demolish her traditional revenue models. Her social media rivals for our attention grow ever more beautiful as time goes on. And of course her virtue is beset by public relations professionals, whose numbers are legion.
And yet, I take solace from the fact that she has chosen the right champion.
I am not one of the traditional defenders of journalism.
I am not a 60-something newspaper editor who cannot understand the internet. I am not the chief executive of a television studio who is suing YouTube for re-publishing his TV news clips. And I am not a media magnate with a sprawling publishing empire that needs to keep his share price up by talking up his print assets.
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Rupert Murdoch, chairman of News Corporation recently declared “the days of free news online to be over.”
NEWSFLASH for Mr Murdoch: the news press no longer control their destiny. The audience is now in charge.
There’s been a lot of talk lately about newspaper publishers investigating new business models. Most of the talk has been the result of declining revenue for news press as classified advertising has migrated online.
Contrary to popular blogger opinion, newspapers aren’t dying because people don’t read newspapers anymore, or because we all get our news from the Internet. While there has been a small decline in subscriptions and sales of the printed newspaper, this isn’t the killer. Its the evaporation of the “rivers of gold” that classifieds represented which has hit the industry hardest.
Subsequently, declining revenues have resulted in cost-cutting that is now affecting quality journalism. And that’s a major concern.