The chief executive of Fairfax's Metro Media division, Jack Matthews, has said that online paywalls will only form a small part of the company's online business.
Speaking at a recent Fourth Estate Domain (FED) forum in Sydney, Matthews said that online paywalls are an inevitability. An online charging model will most likely emerge at the end of the year, once Fairfax's free iPad apps for The Sydney Morning Herald and The Age become $8.99 a month.
However, for the forseeable future, Fairfax's online economic model will be driven predominantly by advertising, which requires higher levels of traffic than can be achieved behind a paywall.
"There will be a limited content set behind a paywall. It will be the smallest part of the model," Matthews said.
"There will still be lots of free content. We need the traffic, we want the traffic, as we make quite a bit of money from display advertising. It's a profitable business.
"We shouldn't think the stuff behind the paywall is going to be the driver of the business. It's going to be the smallest part of the business, I expect."
Matthews said that, once paywalls are erected, consumers might be given access to additional content if they are willing to provide information about themselves, such as postcode, email address, age and gender.
This information would give consumers access to more relevant information, as well as more relevant advertising, and would allow Fairfax to "build a higher yeilding business".
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