The Australian set to abandon current paywall lockdown

By Paul McIntyre & Brendan Coyne | 8 May 2013

News Limited is set to overhaul its paywall model for The Australian this year, aligning the broadsheet with its new metered paywall approach for The Herald Sun and The Daily Telegraph, announced today.

It suggests that the lock-up of all The Australian’s content behind a paywall has not worked as well as hoped in Australia’s first newspaper digital subscription trial.

Several News Limited executives have confirmed the move to the market.

News Limited’s unveiling today of its “News+” metered paywall model for The Daily Telegraph and the Herald Sun is broadly in-line with the pricing structures for Fairfax Metro’s “freemium” model, slated to go live in June or July for The Age and The Sydney Morning Herald. It is also in line with international news paywalls. For example, The New York Times, charges around $15 for full access on fixed and mobile (but no access to apps).

Under the news+ banner the firm will charge $1 for the first month, then $4 per week for full access. But in a bid to maintain print sales, News Limited will charge $10 for first 28 days and then $9.00 per week for full access and print papers delivered seven days per week. To receive the Sunday print papers will cost $4.50 a week, to receive the weekend papers will cost $5.50 per week.

Fairfax is still testing its pricing plans but one Fairfax insider hinted that its digital subscription packages could be 10-15 per cent more expensive than what was unveiled today by News.

The initial “metering” quotas between the two news media publishers, allowing users a number of free stories each week, are broadly similar.

Fairfax is expected to allow 20-30 stories per month free for each user before they are required to sign-up or roll over to the next month for their new quota allocation. News Limited is offering five stories per week to unregistered users and 15 stories per week to registered Daily Telegraph users and 10 stories per week to Herald Sun readers.

One industry player said it appeared that News Limited was copying the Fairfax freemium model but that Fairfax, in-turn, was borrowing heavily from The New York Times.

“The key is The New York Times,” the executive said.    

Some also pointed to the different quotas set for The Daily Telegraph and the Herald Sun, indicating that the Melbourne masthead was “stickier” with its readers than its Sydney stablemate.

“It’s reasonably clever to say we’re putting up a hard paywall of five stories and if you register you get more. A barrier of five stories per week [for unregistered users] is going to eliminate a vast majority of people. It’s really interesting when you get under the hood there are all these models getting overlaid on [reader] usage patterns. You have to construct your model largely on that.”

Although Fairfax does have a registration process for readers of its metro mastheads, it is unlikely that it will force users to register to get their weekly or monthly quota. It is understood it will be cookie-based monitoring.

Much is riding for both publishers on the take-up of digital subscriptions.

One newspaper executive said the exodus of readers from print was accelerating faster than expected but if publishers can swing readers to digital subscriptions for the same price as a printed copy, there is a “margin rainbow” at the end of the process.

“As people naturally wean themselves off newspapers, which is clearly accelerating, they end up migrating to digital at the same price as print but with much lower production and distribution costs. That’s the holy grail of publishing. The cost of journalism doesn’t change but the production and distribution costs do. If you can eliminate those overheads and keep the same revenues, you’re in great shape.”


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