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Will Fairfax Paywall Cannibalise it’s Printing Press?

Posted: June 6th, 2013 | Author: | Filed under: Digital Media, Media, Print Media | Tags: , , , , , , , , | Comments Off on Will Fairfax Paywall Cannibalise it’s Printing Press?

Will Fairfax Paywall Cannibalise it's Printing Press?The death of print is back on the tips of expert tongues with Fairfax Media announcing it’s hoping to replicate the success of its international digital subscription service when it launches a metered paywall in Australia next month. From July 2, visitors to The Age and Sydney Morning Herald websites will have free access to 30 articles each month, any reading after that will cost.

Fairfax chief executive Greg Hywood says the move is part of a restructure which will save the company an additional $60 million by the end of September – this year, ambitiously – Mr Hywood told an investor briefing this morning that the restructure aimed to reduce duplication across the business, with a minimal impact on content and sales.

While Mr Hywood warned of a sharp fall in Fairfax’s overall earnings, he said there were no plans to eliminate the print versions of any of the company’s mastheads. In march this year Fairfax Killed of it’s familiar broadsheets, consigning the format to the history books, with the first tabloid editions of The Sydney Morning Herald and The Age rolling off the printing presses on March 4, does a paywall signal the further shrinkage of physical paper as a source of news?

The battling media company says it’s international digital paywall – launched in March – has attracted almost twice as many subscribers than expected. Mr Hywood reiterated that the company had “no plans” to kill of print, however many media analysts believe that his statements only apply to the company’s popular weekend print editions ::::

Will Fairfax Paywall Cannibalise it's Printing Press?

“Before speculation runs rampant, let me make one thing clear. We do not have any intention to reduce the frequency of print publication of any of our major mastheads in the foreseeable future,” My Hywood told investors. “Why? Because they are profitable.”

During an investor briefing this morning, Mr Hywood said earnings before interest and tax for the second half of the current financial year would range between $129 million and $135 million, indicating the company is primed for a steep profit fall compared with the $AU500 million it managed last financial year.

A Goldman Sachs report forecasts the closure of Fairfax’s printed metros to close in 2015.

“Our central tenet here is that the relentless, accelerating migration of advertising away from print, both in display and classifieds, will see (Fairfax’s) metro media print business slide into significant operating losses, given the high-margin nature of its evaporating print revenues, particularly in classifieds, and its largely fixed-cost base,” the report said.

The Big Issue

Fairfax is late to the paywall model, newspaper behemoth News moved over to paywall with its UK publications back in 2010. gauging by Mr Murdoch’s UK experience, paywall growth can be a slow hill to climb. The UK experience indicates that while free-to-view articles are decent hook, they’re pretty well baited, Newscorp kicked off with 30 free articles a month, it’s set to roll that back to 10 free articles a month.

Socially motivated publication The Big Issue is also set to ditch paper, launching a digital version of its print magazine. Customers will be able to pickup a digital token – online access – to The Big Issue from their regular street vendors, the publisher hasn’t got plans – yet – to entirely do-away with its paper version.

The Big Issue chief Steven Persson says its digital edition won’t replace the printed magazine, instead it’ll give people a choice in how they read it.

“We recognise that an increasing number of people now prefer to read magazines online,” Mr Persson said. “By offering a digital version, we hope to meet the needs of customers and reach out to new audiences to help increase sales for vendors.”

Fairfax’s move to erect paywalls leaves the struggling APN News & Media as the only major Australian publisher to still offer its content free online. The move also comes as The Washington Post sets to launch its paywall next week, having remained one of the few US newspapers to offer its online version for free until now.

While Fairfax has had digital subscription in place for its successful business-focussed Australian Financial Review for some time, it has only just followed News Corp’s lead, locking-down content to its most popular daily domestic newspapers.

Subscribers will also be given access to new additions such as Zoom: a research tool that provides access to archived stories. Shortbooks: interactive e-books written by Fairfax journalists on particular topics, and MyBenefits the company’s loyalty program and base of it’s subscription system for Australian residents. Fairfax’s WAToday, Brisbane and Canberra Times websites remain free.

Allen Williams, Fairfax managing director of Australian Publishing Media, says the international digital paywall was launched in March and has attracted almost twice as many subscribers than expected.

He says the introduction of a paywall for some of its content will cause minimal disruption for the majority of visitors.

“The tablet apps will follow a freemium subscription model that has several free sections and others available only for subscribers.” Mr Williams said. “The approach we have taken is designed to target a small portion of our high-volume visitors without greatly impacting the vast majority of our digital audience.”

Professor Stephen King from Monash University says that newspapers must become bespoke or die. In an articulate piece on his website Professor King says newspaper publishers – such as Fairfax – are struggling to find a pricing model that works for the internet. As their hard copy circulations and advertising revenues fall, publishers are in a race for survival. By adopting a soft paywall, Fairfax recognises that its two premier newspapers, The Age and the SMH, are generalised news sources facing strong competition.

Not all newspaper paywalls are soft. In 1997, the Wall Street Journal was the first newspaper to adopt a paywall, and it uses a “hard” one. In other words, no content without a subscription. Indeed, Fairfax uses a hard paywall for the Australian Financial Review. A hard paywall can be profitable for specialist press: people and businesses will subscribe to get the specialist news and opinion. By adopting a soft paywall, Fairfax is recognising that The Age and SMH are not that different from a huge range of competitors. Read Professor King’s Full Article »»»»

Related: Print Media

source: fairfax
source: apn
source: news
source: reuters
source: thebigissue
source: monash

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