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Breaking: Details of News Limited’s digital subscription plans

I am at what would not long ago have been unimaginable for News Limited: a briefing by senior executives for bloggers and social media. What is even more surprising is that social media are getting the scoop on mainstream media in being briefed first.

The executives present include Richard Freudenstein, CEO of The Australian and News Digital Media, Ed Smith, Chief Marketing Officer of New Ltd, and Clive Mathieson, editor of The Australian. Many of the most visible people in social media in Australia are here, including @servantofchaos, @silkcharm, @GaryPHayes, @mediahunter, @tiphereth, and @katydaniells, with @bhowarth and @mumbrella crossing the chasm as both social and mainstream media protagonists.

Here are some notes live at the briefing.

There will be a formal announcement later this week on how The Australian will become a subscription website. This will happen in October, as Freudenstein originally told the Mumbrella conference in June.

The digital pass (including online, app, and mobile site) will be launched at $2.95 per week for all digital formats, with initial access being free. For digital plus Saturday subscription it will be $4.50, and digital plus six-day subscription will be $7.95 per week. Existing six-day subscribers will get the digital formats for free for the first year.

Advertising is and will continue to be by far the largest revenue stream for News Limited. Transactional revenue will continue to grow, and they will continue to invest in. Advertising will continue to be important in the digital environment.

Segments include:

Niche audiences. Lifestyle sites like Tastespot, Vogue, engage a deep committed audience, with CPMs as high as 6 times as high as general news sites. These are usually done as a sponsorship rather than display sell.

Traditional news sites. Pure display revenue will not be enough to sustain quality journalism, so the plan is to create a subscription revenue stream. It will be a freemium model, with some content free and other behind a pay wall. They are optimistic, though recognize that this is an experiment.

The target audience is not the digital natives, but to start the ‘migrators’ or ‘migrated’ that are probably not-to-young but are familiar with the News Limited brands.

The price will be relatively cheap, paid regularly by credit card or direct debit.

Wall Street Journal has a successful freemium model which News Limited will follow. Articles can be moved from free to paid depending on the time of year, time of day, or other specific dynamics to fine-tune.

The Times of London is going for a 100% subscription model, which suits their market. They have announced 10% increase in subscribers to 110,000.

Other companies such as New York Times, Boston Globe, and The Independent have or have announced paywall plans.

A launch date will be announced soon, as they finalize the technology, which has turned out to be a significant initiative.

On The Australian website a ‘pass’ image will be displayed next to premium articles. A ‘plus’ sign indicates additional content and social media sharing features.

As is the case with The Times, mousing over front page menus will provide more detail on stories.

If non-subscribers try to access a premium story they will get the beginning, details of what the full story contains, and an invitation to subscribe.

Google searches will allow you to access premium content fives times a day, once per day from Facebook, and an unlimited access from Twitter. You will be alerted that you are a guest and you will not be able to browse further into premium content from there. Those numbers will be changed based on experimentation and how it develops.
[UPDATE 19 October: I have just received a clarification on what was said at the event:
At launch Twitter and LinkedIn links will not provide access to premium content. If the user is not a subscriber they will see the first two paragraphs as any non-subscriber will see. As mentioned on the night News Limited will be constantly reviewing what is the best user experience and what the audience wants most, so may make adjustments to this after launch.]

New features include a 5 or 10 minute digest which shows brief summaries of the major stories with an ability to click through to the full story.

Sections such as business and higher education will be expanded.

There will be new mobile sites which will have the same free and paid content division, with the same login and password used by premium users as on the website.

The Guardian app is likely to be an inspiration if they create an iPad app.

Premium users will also be served advertising on both the web and mobile sites.

Advertising will be served contextually and behaviorally. In the longer term there is interest in serving ads based on users’ social networks and implicit interest profiles.

Everything was developed in-house.

The idea is to shift from newspaper brands to ‘media franchises’. This includes many other manifestations of media, including events and other activities beyond traditional media delivery. Rather than breaking the news, the intention is to break news and then own it through the day.

Search engine optimization is central to the strategy.

Online editors have always been co-located with print editors, with joint ownership of content and distribution. It is a journey for the journalists, editors and sub-editors to shift into a more online world. All need to be thinking about how best to use content in a digital world.

Each desk will need to consistently create sufficient quality content that merits being premium content.

They said that The Australian has never cut journalists, and there are new staff including people with new skills, such as developing infographics. Savings are coming from creating shared services across the operating divisions. There is significant investment in reskilling, including an emphasis on video, though still a recognition that not all journalists will become competent across all digital skills.

Branded content is ‘worth looking at’ as a business model.

A new iPad app for The Australian will be launched in ‘the foreseeable future’.

News Limited’s modeling suggests increased advertising revenue in addition to digital subscription revenue.

There will be a “top-shelf” major advertising campaign created by George Patterson Y&R to promote the new offerings.

A key concept of where News is wanting to go is multi-platform ‘media franchises’ that will include the cable TV Foxtel, so bringing together digital, mobile, small screen, and big screen in particular domains such sports or business.

More generally ‘paid aggregation’ in a similar vein to cable TV may be a model that can be applied across other media spaces.

Overall, it was very refreshing to hear the News Limited executives be open about the challenges they have faced in shifting online from the well-established medium of newsprint. I have previously called the shift to paywalls ‘The Grand Experiment’, and that is exactly how News is approaching their paywall.

As a footnote, later this week News Limited is launching a site on the future of journalism (www.futureofjournalism.com.au, though it’s not open yet), with bloggers invited to contribute alongside News Limited journalists. An infographic will be launched at the same time.

The site promises to be interesting, though note that News describes it as a way of putting the publisher perspective on journalism.

For the most current insights and trends in the living networks, follow @rossdawson on Twitter!

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Ross Dawson is globally recognized as a leading futurist, entrepreneur, keynote speaker, strategy advisor, and bestselling author. He is Founding Chairman of AHT Group, which consists of 3 companies: consulting, publishing, and ventures firm Advanced Human Technologies, future and strategy firm Future Exploration Network, and events company The Insight Exchange.

Ross is author most recently of Getting Results From Crowds, the prescient Living Networks, which anticipated the social network revolution, the Amazon.com bestseller Developing Knowledge-Based Client Relationships, and Implementing Enterprise 2.0. (click on the links for free chapter downloads). He is based in Sydney and San Francisco with his wife jewellery designer Victoria Buckley and two beautiful young daughters.

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