EDITOR'S LETTER: Reinventing the newspaper wheel

By By Darren Davidson | 21 October 2011
AdNews editor, Darren Davidson.

When Pink Floyd’s Roger Waters sang “All in all it’s just another brick in the wall”, he wasn’t talking about online paywalls. Yet, the dogged determination of the “teachers” in the lyrics to force their will on school children is an apt metaphor for Rupert Murdoch’s digital strategy.

On Monday, The Australian will launch a paywall around sections of the paper’s website in the face of deep, deep cynicism and resistance from internet users who do not wish to pay for online content. The paywall is going up brick by brick, as News Limited adopts a ‘suck it and see’ approach in a bid to retain the majority of its online audience.

Mindful of experiencing a sharp reduction in online users with a gated fortress à la The Times in London, News Limited has clearly absorbed lessons from experiments in other markets and those closer to home, and adapted its Australian strategy accordingly.

As Malcolm Gladwell said in Cannes earlier this year: “Steve Jobs is proof that you don’t want to be first.” You want to be second, or third. Gladwell cited Xerox and Apple as his examples of this technology truism. You could apply the Gladwell model to Fairfax Media’s Australian Financial Review (AFR), The Australian’s main competitor, which has struggled to make a real go of its paywall model. The latest rumours suggest the AFR will pull a reverse ferret and radically alter the model.

But will The Australian triumph where the AFR has struggled? Paywalls come in many forms. They can be watertight, like that at The Times, but increasingly they are porous, enabling publishers to charge for access to content while also admitting casual visitors and allowing sharing. The Wall Street Journal, also owned by News Limited’s parent company News Corp, puts much of its business and finance coverage behind a paywall but allows unrestricted access to other, less specialist stories.

This is the path The Australian has chosen to tread. It makes sense. The paper will be able to retain its mass audience reach, ensuring it retains and – in theory – grows its ad revenue; while specialist news and information, which is expensive to generate, will attract a smaller band of followers, who become paying members of a club. This exclusive club will attract advertisers keen to direct targeted ad campaigns at niches.

But there’s a elephant in the room: The ABC. The consumer appetite for paid-for online content will remain uncertain, while a taxpayer-funded source of news and information continues to operate unfettered. The good news for publishers is that newspaper content, whether in print, tablet, web or mobile form has life in it yet. Total eyeballs across multi-platforms is rising. It’s not an audience problem. It’s a revenue problem.

But, you can’t fix the revenue model without fixing the editorial model. As well as looking for a new business model on the web, newspapers need to reinvent their content offering, which News Limited is doing.

In this week’s ‘Marketer Profile’, News Limited group marketing director, Ed Smith, talks with relish about brand extensions, as News Limited morphs from a holding company into a hub for entertainment and news brands. There’s already a lot of goodwill among agencies and advertisers, which bodes well for the paywall, and News Limited’s franchise approach will give brands a whole new space to play in.

If at first the paywall doesn’t go well, don’t write it off. News Limited is in the long game. The first faltering steps of the The Times’ paywall were met with a barrage of acidic criticism from media commentators, but as News Corp has since shown, it won’t be deterred.

I, for one, hope The Australian succeeds. Great content does have a value, and a cost. If we can’t start charging consumers for it, then quality will inevitably decline.

This editorial column originally appeared in the October 21 edition of AdNews. Click here to subscribe.

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