When will Australian newspapers begin the great experiment of erecting paywalls around content online? It seems it may be a little later than we thought.
Last June, News Limited said that it would begin to charge for online content at The Australian by October, and we are almost there.
Meanwhile Fairfax has said it will begin charging for content delivered on its spick and now award-winning iPad apps by the end of this year, meanwhile adopting a “freemium” model online under which some content was free and some paid.
But is it going to happen? There are rumours of collywobbles and delays on both sides.
In the Fairfax annual results it was reported that there had been 215,000 downloads of the Fairfax iPad app, and the “premium content pricing strategy” was described as “under way” but it is hard to find out how many of those who have downloaded the apps are active users, let alone how many will sign up for the paid deal when it is introduced. Overseas experience suggests a small fraction.
Meanwhile, word around the traps in the digital industry is that Fairfax has been testing out its proposed new Australian Financial Review behind-paywall app on the market, and has been told that it is all wrong.
Views include that it is too close to The Age and The Sydney Morning Herald apps, which are designed as beautiful but primarily “lay back” browsing experiences, whereas those who access AFR content online are primarily doing research.
Or that is what digital media industry sources tell me they have said.
As for News Limited, the same sources expect to see a wall of a kind introduced at The Australian by October, but for the initial emphasis being on getting people to sign up and register, rather than pay money. Once a database of users is established, the next step will be paid subscriptions, but probably not until next year.
The tabloids will follow — but with no sense of urgent hurry. And everyone expects the result to be smaller audiences, and of course declining influence. It is about quality and sustainability, not size.
Meanwhile, Australian industry figures are watching what is happening in the States, where paywalls with holes in them has been the approach of choice ever since The New York Times launched its rather sophisticated paid content approach in March.
Today we have the announcement by The Boston Globe of its new paid website, under which breaking and local news is free, but after reading five other stories you are asked to subscribe. Readers coming in sideways from social media sites will be allowed to view just the one story that draws them in.
I gather one of the reasons for the delays at Australian media sites is back-end issues, and the problems of expecting people to pay for the app when the same content remains free on the website.
Hence, perhaps the most interesting aspect of The Boston Globe’s approach is that there is no app in sight. Instead, the new website is device friendly, adapting to whatever screen it is viewed on.
Despite the undoubted beauty of the best of the apps, the smart money overseas is now on not apps, but rather websites that adapt — one platform that works differently on different devices.
Which raises a painful question: was all that money spent on developing in-house applications in Australia the best way of spending available dollars?
Time will tell. But expect the start of the great experiment of paid content in Australian mass market newspapers to be months away, rather than weeks.
Watch the AFR circulation slide even further. Various of the big financial players are going 100% digital and scrapping their newspapers. The vice is tightening.
If they continue to confine their tablet editions to iPad, they’ll miss out on people like me who have Android devices.
A key negative to paywalls is that advertisers get their ads seen byb fewer and fewer eyes. Online ads are all about maximum viewers clicking through.
Putting content that people might want to see behind a paywall will prevent a vast percentage of the previous readership accessing the paid content (they will migrate to places like the ABC or elsewhere where content is free) and thus stop them visiting pages that contain advertising.
It does no good for News or fairfax to state to their advertisers that their online readership has dropped to 20% of the numbers they were pre-paywall but those readers are ‘more engaged’ because they are paying for it.
Advertisers want two things from online advertising.
1. High visability placement where they get seen
2. A high click-through rate from their ads.
Putting the content people want to see behind a paywall acts as a natural filter, significantly reducing the number of people willing and/or able to pay to see it, particularly as there will be other sites providing that news content for free.
Fewer people seeing the ads results in fewer people clicking through, resulting in fewer hits per ad.
In turn, watch advertisers bite back. I can see the conversation now.
“So we are only getting 20% of the viewers that we used to before your paywall?”
“Yes, but they are ‘more engaged’ because they are paying to see it”.
“Well, we are seeing 80% less click throughs since the paywall, so we assume that you will be reducing your online ad rate by 80% to compensate us for our losses?”
“Um…..?
Paywalls are a dumb idea.
It might work if you have unique content that meets the needs of the readership, as Crikey was once renowned for with its political scoops, but if its news you can get much the same from free sites such as the BBC, ABC, CNN, etc, then it looks more and more like a self inflicted wound.
I hadn’t read the Age since it appeared (with the Geelong Advertiser) on my parents’ brekke table when I was a kid. However, I downloaded the SMH app out if curiosity, because I saw its design praised by people whose opinions I respect. I then downloaded the Age app when it appeared (I live in SA, but know Melbourne better than Sydney), opened it every day to do the Sudoko, and gradually started enjoying not only the layout but also the articles.
Will I pay for it? Not if that means paying to view ads instead of articles. Currently the ads (also beautifully designed) slide in over the article you are trying to read. This is momentarily annoying, but you can slide the ad back out of the way (although some more recent ads refuse to slide, and you have to hunt out the close box and prod it a few times). I would put up with the ads in a free app (as I am now doing), but it’s a fine balance. A few more annoying ads, and I won’t be willing to navigate through them to read articles.
So any price for this app would have to be vanishingly low, or a bit higher but have no ads, for me to pay it.
I’m told some pay TV was ad free once upon a time. These aps and stuff everyone is writing about are all double dutch to me. How will it work if I want to search back a few weeks and review something so I can quote it? Reading about ads which slide over something I am trying to read wont impress me. I do pay for Crikey because Crikey do not discourage me from using my given name. Some News Limited publications do not like too many signed opinions, they seem to prefer sock puppets perhaps there are hidden litigation issues. Electronic papers just like the old hard copies are nothing without their important readers. We all recall when advertisers in the US sued because so many papers were lying about their circulation numbers! Readers well some of us need a voice and we will pay for access but we need to be respected. Edward James