Category Archives: Newspapers

Is 2014 The Year Of The NZ Newspaper Paywall?

Is 2014 the year when the leading New Zealand newspaper websites (i.e. Stuff.co.nz and NZHerald.co.nz) put up paywalls and begin charging Kiwis for access to content?

Those in the know seem to think so:

  • In a May 2013 NZ Herald column, APN New Zealand chief marketing officer Kursten Shalfoon predicted 2014 would be “the year of the paywall”
  • Science Media Centre’s managing founder Peter Griffin told StopPress in August 2013 that “by early 2014 [APN and Fairfax] need to have paywalls or risk falling further behind … maybe irrecoverably”
  • “I think inevitable somewhere in the future there’ll be a paid model for online,” APN CEO Martin Simons said on TVNZ’s Breakfast [in September 2012], echoing recent comments by Herald editor Shayne Currie (reported by NBR)
  • Fairfax Media says it is only “a matter of time” before its online publications in New Zealand go behind a paywall. Acting managing director Andrew Boyle told Fairfax today [June 2013] that when or how it will happen to websites such as stuff.co.nz is still up for investigation. (per TVNZ)

Why the need for a paywall at all? Take a look at what’s been happening with advertising expenditure over the last decade (to which we’ve appended our projections for the next three years, based on trends over the previous ten years):

adspend
Source: Advertising Standards Authority Advertising Industry Turnover (2003-2012) plus our own estimates (2013-2015) based on trends over the previous decade

If we base our projections on trends from just the last three years, the decline in print revenues is even more severe:


newspaper revenue projections
Source: Advertising Standards Authority Advertising Industry Turnover (2003-2012) plus our own estimates (2013-2015) based on trends 2010-2012

Yes, Stuff.co.nz and NZHerald.co.nz are leading recipients of interactive advertising revenues — but (according to a Pew Research Center study released in 2012) US newspapers are losing US$16 in print revenue for every US$1 of digital they gain. The perceived wisdom, that print dollars are being converted into digital dimes, turns out to be understating the problem.

As noted in a June 2013 Stuff article on the topic, newspaper paywalls around the world have generally been introduced under three models:

  • The “freemium” model, as used by Rupert Murdoch’s The Australian paper [and NBR here], allows users to get selected content for free and pay for the rest.
  • A “hard” paywall, employed by the likes of The Wall Street Journal, makes content available only to paid subscribers.
  • Many others [such as the New York Times] use a “metered” paywall, which grants access to a certain number of articles for free each month.

The metered option seems to be the most favoured by APN and Fairfax for their respective NZ websites, especially given the negative reaction to the freemium model when the NZ Herald tried it for a short time in 2005:

The Herald’s method put premium content such as opinion pieces behind a pay mechanism, with the goal of leveraging the brands of writers such as Peter Griffin, Kerre Woodham and Brian Gaynor and turn it into paid subscriptions from their audience. The reality was completely different.

“It was a disaster. Those of us sitting behind the paywall resented it … worst of all our engagement with the community dried up overnight. We were in the dark and felt a lot like mushrooms,” says Griffin.

The metered content strategy, on the other hand, has been more successful, at least for the poster child for the strategy, the New York Times:

… the Times recently reported that 56 percent of its revenues now come from readers [i.e. subscriptions for both print and digital content]. Given that reader revenue is now growing as paywalls have gone up, and that print ads remain in sharp decline, majority reader revenue seems to be the preferable market position.

Thus far, NZ media paywalls are few and far between (and their achievements seem relatively modest). Apart from specialist trade journals such as the NZ Doctor, the primary consumer-facing publications implementing paywalls thus far include NBR, the NZ Listener and two independent local newspapers:

  • Privately owned regional paper the Whakatane Beacon launched a paywall in February 2013. After about two months, more than 200 people had signed up. The Beacons model is largely designed to retain newspaper subscribers by giving them free online access. Those living outside the distribution area can pay $91 a year to read its website – the same price as a paper subscription.
  • Ashburton Guardian editor Coen Lammers told TV3 News that the decision to put the Guardian behind a pay wall in November 2012 was a matter of when and how to implement it, rather than if they should. “Because we had a very basic website which had no advertising and very little audience, we had nothing to lose. If you compare it to stuff.co.nz or with the New Zealand Herald website, which have millions of hits every week, they’ve got a lot to lose. They have a problem that they have to convince their readers that they’ve been getting it for free for years and, ‘Sorry, now you’ve got to pay for it.’ That’s obviously a massive quandary for people in charge there.”

And what about NZ’s most famous paywall adopter, the National Business Review? NBR indicated in 2012 that it has “just under 3000 individual paid subscribers, plus some of New Zealand’s largest companies” [which purchase corporate subscriptions shared across their organisations].

AUT researcher Merja Myllylahti, in a study set to be published in Digital Journalism, commented in June 2013 that “the National Business Review is making around $500,000 per annum from its paywall, with almost half of subscribers reading content online.”

On the other hand, NBR publisher told TV3 News at the end of 2013 that “the NBR website was losing $10,000 a week. Now, it’s making money.” Clearly, paywalls were a very smart idea for NBR.

Merja Myllylahti observed in her report that “generally speaking financial newspapers tend to make more revenue out of their paywalls, because their subscription fees are higher and they have corporates paying for the access.”

We agree — but believe that’s only part of the story. NBR is able to charge what it does because it provides access to content that is not available elsewhere (that’s why, as we see it, some NBR stories start out behind the paywall and then become free, when the news is no longer exclusive).

The Wall Street Journal‘s original paywall strategy was considered successful for the same reason: unique content (recent changes since the paper was acquired by Rupert Murdoch have seen that strategy evolve substantially).

So the challenges for Fairfax and APN as they consider whether 2014 will indeed be the year of the paywall are substantial:

  • Is their website content unique enough to warrant a fee (in an online news environment where they’re not merely competing with each other but also with TVNZ, TV3, Prime News, all the radio networks, the BBC, CNN, Facebook, Twitter, LinkedIn, Google News, YouTube, MSN, blogs, yadda yadda yadda)?
  • Will they generate enough subscription revenues to offset the advertising dollars they will lose as reader eyeballs bounce off the paywall and head to other sources for their regular newsfix?
  • Will they cease to be “the preferred news source” and “the newspaper of record” when their content is not freely available, to be searched for, linked to and shared in a crowd-distributed world?
  • Can they introduce enough new content, not available in printed form nor previously featured on their website, so that past readers believe it’s worth subscribing?
  • With the tastiest tidbits hidden behind paywalls (because, frankly, that’s where they’ll need to be to attract subscribers), will the content that stays free be too dull to lure in prospective readers?

The problems aren’t (quite) insoluble. For example, the New York Times and the Wall Street Journal have both come up with new paid content options that are generating solid buzz.

Here (from November 2013) are three new niche products from the New York Times:

  • Food & dining: Sam Sifton, a former Times restaurant reviewer and national editor, is heading up this project. Expect lots of video and how-tos. This product will grow out of the Times’ well-read Dining section. The big question won’t be interest; it will be what kind of product might the Times create that consumers will value enough to pay for separately. Food and dining is a big, free world, with television content hugely popular. Recipes won’t be enough — nor will thoughtful and entertaining commentary. What might help would be third-party content, a partnership with a food outlet that has affinity with the Times, or functionality that extends the experience. How about some kind of special deal with OpenTable that gives subscribers some kind of preference or deal, for instance?Michael Zimbalist‘s R&D staff demoed “Julia” for me last week. Julia (check out the demo here) is a magical Internet tablet, using gestural and voice interfaces to use tablet-like content and then see ingredients displayed on the countertop.

    The R&D Lab describes Julia as “an experiment to think about how usage data and sensor data could be tied into a feedback loop between a publisher and its users to improve future offerings.” Julia may not be ready for prime time — or kitchens may not be ready for it — by mid-2014, but it’s the kind of wow that could get people to buy, much as the new Mayday feature on the Kindle Fire HDX is doing. Sometimes you sell the steak, and sometimes you sell the sizzle. What will be the Times’ sizzle here and in the other products?

  • Need to KnowCliff Levy, a much decorated Times editor, is at work on this smartphone-first (tablet-second, web-third) product. It’s intended as a first briefing on the world: Put down that Facebook and smell the globe. Thompson talks about it setting a news agenda, with an “American voice” and a witty, engaging tone that Levy has surfaced in the Times’ NYC Metro coverage.

And here’s a sample new-look initiative from the Wall Street Journal:

WSJ Live, launched [in September 2011], is a milestone product. It’s not Fox News. It’s not CNN. It’s not New York Times news video. WSJ Live is its own thing, and a model for the news industry. Newspaper companies can talk the talk of becoming multimedia companies, but most are still text-bound. WSJ Live is a news video product that does a great job of leveraging the new technologies of the day and converging them to create an easy-on-the-eyes, easy-to-use new consumer product.

Notice, first, that WSJ Live is a tablet product — or more precisely a “lean-back” product, available not only on your iPad or your Galaxy Tab but aiming to get in early on “connected TV” platforms. If you want WSJ news video, you can access it on WSJ.com and on your smartphone. WSJ Live, though, understands that the tablet is today’s go-to platform for this kind of news experience.

It leverages the tablet-sized screen well. It mixes on-the-hour scheduled programming with on-demand access. It balances the talking heads of its global reporting workforce, via Skype, with anchor-hosted programs (News Hub), photo stills, and graphics.

So yes, newspaper paywalls can work — but they do take investment in new kinds of content. Like we said, a big challenge for our leading newspaper publishers.

Newsreel

Fairfax and APN have both just released financial updates. The main points:

  • Fairfax Media revenues for the second half of the July 2010-June 2011 financial year (measured on an as reported basis) are currently 4.5% lower than last year
  • While the rate of decline in advertising levels has abated slightly over the past month, Fairfax Media does not anticipate market conditions over the remainder of the current financial year improving sufficiently to offset the declines experienced to date
  • APN News and Media Ltd says first half earnings will be up to A$20 ($NZ27.1) million below those in the first half of calendar 2010, but it expected trading to improve in the second half of calendar year 2011

These aren’t surprising results, given the current economy (and the effects of the Queensland floods and the Canterbury earthquake). The difference in expectation between the two organisations (Fairfax pessimistic, APN optimistic) is more about when their respective financial years end (Fairfax June, APN December) than any real difference in future outlook.

Every Eyeball Matters

While some newspapers globally are agonising over the killing fields of the internet and whether paywalls can solve the problem of fiscal death by click, others have joined magazines in a whole new approach to the digital dilemma: add online readers into your total circulation base and charge advertisers for all of them.

America’s Audit Bureau of Circulations (ABC) has just modified its definition of a digital magazine in the U.S. and Canada to accommodate new reading devices such as the Apple iPad. The new standards state that a replica digital edition must include a print edition’s full editorial content and advertising, but it no longer needs to be presented in a layout identical to the print version. Replica digital editions will continue to be included in a magazine’s circulation guarantee, or rate base.

Predictably, Wired magazine was the first publication to seek review of its iPad version, which will qualify as a digital replica edition under the bureau’s new guidelines. GQ has offered an ABC approved replica app for the iPhone and iPod Touch since December 2009.

Last week the ABC board gave its initial approval to the creation of new U.S. reports that better reflect a publication’s total audience across a range of products. As a result, publishers may begin reporting such items as:

  • E-reader distribution averages
  • Mobile app purchases
  • Total paid and verified circulation emanating from multiple products, including branded print editions associated with the flagship publications.
  • A new “Publishing Plan” executive summary box on the first page, noting frequency, delivery platforms, and distribution methods across a publisher’s various print and electronic editions.
  • Continued use of Audience-FAX, the 2007 initiative that allows U.S. publications to report print and online readership figures, as well as Web site and audience data from comScore, Nielsen Online, Omniture, or other sources audited by ABC Interactive.

In New Zealand, Nielsen Media has been reporting on the combined readership impact of the main metropolitan papers’ print and online offerings for the last year or so; there’s been little demand for a similar metric for magazines since so few have posted significant content online. But the (still theoretical, no date set) arrival of the iPad and similar devices may just encourage some local magazines to offer digital replicas — at which point the urge to monetise will definitely manifest itself.

Shock! Horror! Readership Results

So the latest magazine and newspaper readership and circulation figures are out and most publications’ numbers are down. Quelle surprise! And with a recession on, too — go figure.

Let’s put the bloodbath into some sort of context. Based on ABC circulation figures, here’s how our biggest-circulating newspapers fared (Audited Net Circulation to 31 December 2009 vs 12 months earlier):

  • New Zealand Herald, down 5.8%
  • Waikato Times, down 0.5%
  • Dominion Post, down 4.3%
  • The Press, down 2.4%
  • Otago Daily Times, down 0.3%
  • Southland Times, down 0.6%

Oh, and Rotorua’s Daily Post actually deserves a special mention for managing to increase its Net Circulation by 24 copies an issue, year on year. Not statistically significant, perhaps, but still a signal honour in comparison to the rest of the newspaper industry in 2009.

So how do these figures compare to global performances? The UK also came out with national newspaper circulation results on Friday, and those results make far more depressing reading:

  • The Times recorded the biggest year-on-year circulation fall of any UK national paper in January, down 17.69%
  • The Daily Telegraph reported a 11.76% year-on-year decline
  • The Guardian showed a 15.76% decline
  • The Independent was down 13.78% year on year
  • the Financial Times dropped 8.52% year on year

There — we feel better already!

Readership Wrangle Across The Ditch

Little bit of a stoush over in Oz, with News Limited chairman and chief executive John Hartigan accusing Roy Morgan Research of setting out to destroy an attempt by newspaper publishers to find an alternative readership measurement system.

In an interview quoted in The Australian (a News Limited publication) Mr Hartigan blasted the Roy Morgan Research company and its chairman, Gary Morgan, as “arrogant” and “intransigent” as the long-simmering argument over how best to measure print media readership erupted into open hostility.

Seems that News, Fairfax, West Australian Newspapers and APN News & Media had put readership research up for tender in June through industry body The Newspaper Works. Last week, however, Fairfax Media withdrew from the tender process and instead threw its support behind Roy Morgan. Industry body Magazine Publishers of Australia, led by Seven Media Group’s Pacific Magazines, also withdrew. Angry words followed.

As things currently stand, Fairfax and the Australian MPA will remain with Roy Morgan; meanwhile the tender process continues, with GfK:Mediamark Research & Intelligence, Ipsos MediaCT and TNS Australia on the project shortlist. At stake: survey revenues of perhaps A$7 million per year.

This tale isn’t over yet – not by a long shot.

Newspapers Debate: "What do we do about Google?"

The World Association of Newspapers (WAN) asks the question — and offers a potentially fiery debate — at its upcoming World Newspaper Congress in Hyderabad India (December 1-3).

Should we, asks WAN:

Applaud our gains in web site traffic? Develop closer partnerships with Google and their competitors? Launch our own search engines and collective news portals? Lobby to change or enforce copyright laws online? Sue – or encourage anti-trust cases? What DO we do about Google?

The Great Debate at the 62nd World Newspaper Congress will examine these and other such questions as news publishers world-wide examine and discuss their options and strategies for getting a bigger slice of the internet advertising revenues which are today being massively reaped by Google.

FOR GOOGLE:

David Drummond, Senior Vice President and Chief Legal Council of Google, will be on stage to give the search giant’s perspectives.

Mr Drummond leads Google’s global teams for legal, government relations, corporate development and new business development, including strategic partnerships. Before joining Google in 2002, he served as its first outside counsel and worked with Larry Page and Sergey Brin to incorporate the company and secure its initial round of financing.

FOR THE NEWSPAPERS:

Gavin O’Reilly, CEO of Independent News & Media and President of the World Association of Newspapers and News Publishers (WAN-IFRA), will debate on behalf of the newspaper iindustry.

Gavin O’Reilly was probably the first major news industry personality to publicly criticise Google, when he called them `kleptomaniacs’ in a 2006 speech where he said they were “increasingly aiming their strategic efforts at traditional content originators and aggregators like newspaper publishers. The irony is that these search engines exist, largely, because of the traditional news and content aggregators and profit at their expense’’.

ON THE SIDELINE, HECKLING:

Since then, others have joined in the chorus of opposition, most notably Rupert Murdoch, who said last month: “The aggregators and plagiarists will soon have to pay a price for the co-opting of our content. If we do not take advantage of the current movement toward paid content, it will be the content creators Š who will pay the ultimate price and the content kleptomaniacs who triumph.’’ Mr Murdoch just this week threatened to block Google News from taking any content from News Corp web sites.

AND THEN THERE’S US:

Marketers everywhere would love to see a Win-Win resolution. None of us will benefit if newspapers fall over. But we’ll also be the poorer if the internet devolves into a collection of islands hidden behind paywalls.

There are no easy answers. But we look forward to the Debate and its outcome.

The Herald Sees Red (Bull)

Coming in early January to the pages of the NZ Herald: The Red Bulletin.

red-bulletin

This self-described “almost independent monthly magazine” is, in case you didn’t pick from the cover shot, a lifestyle magazine powered by Red Bull.

Want to know a little more?

Here’s the Mission Statement for the magazine:

BASE jumpers and neurologists, hip-hop artists and top chefs, classic planes and triathletes, visual artists and Formula One drivers: the world of Red Bull is shaped by creativity and adventure, by courage and a lust for life, and is populated with an inimitable group of heroes. The mission of this magazine, the first English-language issue of which you hold in your hands, is to feature stories about this world and its inhabitants, their ideas and their projects.
The idea for The Red Bulletin was conceived at 2.30 in the morning in a mountain hut in the Austrian Alps near Salzburg. It attempts to convey that spark of excitement that rushes through the unique people who manage to transform their crazy ideas into reality, thanks to the energy in their bodies and minds.
Viewed another way, this magazine is part of our logical development to become a content provider, thus enabling us to find a way to really tell the world about the incredible stories we create. These stories must be told by the best writers and best photographers, explored in real depth, with our obsessive attention to detail, but all with a wink of the eye.
There is no shortage of stories for us to draw from. Felix Baumgartner would have never skydived across the Channel without “wiiings”. Sebastian Vettel would never have made it to Formula One without Red Bull’s youth training programme. Freestyle motocross wouldn’t have gained worldwide recognition without the Red Bull X-Fighters. I remember the first reactions to our idea of creating a race for the best pilots in the world – no one could foresee that, a few years down the line, the Red Bull Air Race World Championships would attract millions of fans across the globe.

Base jumpers and neurologists, hip-hop artists and top chefs, classic planes and triathletes, visual artists and Formula One drivers: the world of Red Bull is shaped by creativity and adventure, by courage and a lust for life, and is populated with an inimitable group of heroes. The mission of this magazine is to feature stories about this world and its inhabitants, their ideas and their projects.

The idea for The Red Bulletin was conceived at 2.30 in the morning in a mountain hut in the Austrian Alps near Salzburg. It attempts to convey that spark of excitement that rushes through the unique people who manage to transform their crazy ideas into reality, thanks to the energy in their bodies and minds.

Viewed another way, this magazine is part of [Red Bull’s] logical development to become a content provider, thus enabling [them] to find a way to really tell the world about the incredible stories [they] create. These stories must be told by the best writers and best photographers, explored in real depth, with obsessive attention to detail, but all with a wink of the eye.

There is no shortage of stories for [Red Bull] to draw from. Felix Baumgartner would have never skydived across the Channel without “wiiings”. Sebastian Vettel would never have made it to Formula One without Red Bull’s youth training programme. Freestyle motocross wouldn’t have gained worldwide recognition without the Red Bull X-Fighters. No one could foresee that, a few years down the line, the Red Bull Air Race World Championships would attract millions of fans across the globe.

The Red Bulletin considers itself to be a global monthly publication, adapted to reflect different local cultures. The magazine first appeared in Austria, Red Bull’s home, at the end of 2007. The positive reaction to the concept left [them] with no other option but to expand internationally. The UK was [their] second country …

Now it’s New Zealand’s turn. The Red Bulletin will appear as an insert in the pages of the NZ Herald, on the first Tuesday of the month, from January 5 2010.

And yes, they are accepting local advertising. If your target audience has w-i-i-i-ngs, talk to your NZ Herald rep.

Dear Mr Murdoch – Talk To Mr Jobs

That little problem that Rupert Murdoch has — the one about the Internet tearing his business plan to shreds?

Perhaps he should have a chat to Steve Jobs about selling newspapers through iTunes.

Clearly Si Newhouse (publisher of Condé Nast magazines) has been having a word or two with the reality-distortion-meister. Lo and behold, hot on the heels of the closure of Condé Nast titles Gourmet and Modern Bride comes the news that GQ is going mobile from its November “Men of the Year” issue.

GQ on Mobile

Condé Nast has announced it has developed a mobile app that offers users an exact replica of its print mags in online form, starting with GQ. The free app is made for the iPhone and iPod Touch, and issues of GQ will be available for $2.99 in the iTunes App Store on the same release date as the print issue. Ads will appear as they do in the print version, but will also offer more interactivity as video, e-commerce and linking capability are all enabled as part of the new app.

Okay, it may be a challenge fitting the Wall Street Journal layout onto the iPhone  screen, but hey — Mr Murdoch was never one to take the easy road.

NZ Herald Goes Window-Shopping

The New Zealand Herald has developed a new product that it’s been pitching to advertisers over the past week or so (but which will only proceed if there’s sufficient interest/dollars). The new title is called the NZ SHOPPING GUIDE and it’s a magazine-sized, advertising-only, letterbox-distributed publication in the finest tradition of BEST BUYS and other Direct To The Home publications. It’s a national title, intended to provide the retail sector with a relatively low cost alternative  to reach shoppers around the country.
The declared mission of the NZ SHOPPING GUIDE: “great deals on everything you need for yourself, your family and your home”. Accordingly, the publication has been divided into three sections:
My House – Inside
My House – Outside
My Family
The challenge for the Herald sales team is twofold:
1. Advertisers don’t typically segment their offers or their advertising into the categories into which the Guide is segmented. Will retailers be willing to
develop separate material for this new publication?
2. Without editorial content, the SHOPPING GUIDE rises or falls on the appeal of the offers made in the advertising. Will retailers be willing to dig deep enough to offer sufficiently compelling deals?

The New Zealand Herald has developed a new product that it’s been pitching to advertisers over the past week or so (but which will only proceed if there’s sufficient interest/dollars). The new title is called the NZ SHOPPING GUIDE and it’s a magazine-sized, advertising-only, letterbox-distributed publication in the finest tradition of BEST BUYS and other Direct To The Home publications. It’s a national title, intended to provide the retail sector with a relatively low cost alternative  to reach shoppers around the country.

The declared mission of the NZ SHOPPING GUIDE: “great deals on everything you need for yourself, your family and your home”. Accordingly, the publication has been divided into three sections:

  • My House – Inside
  • My House – Outside
  • My Family

The challenge for the Herald sales team is twofold:

  1. Advertisers don’t typically segment their offers or their advertising into the categories into which the Guide is segmented. Will retailers be willing to develop separate material for this new publication?
  2. Without editorial content, the SHOPPING GUIDE rises or falls on the appeal of the offers made in the advertising. Will retailers be willing to dig deep enough to offer sufficiently compelling deals?

NBR Battles Against The Tide

The National Business Review (NBR), well used to looking at a variety of business models, is now trying out a new one of its own: a new paid online Subscriber Only Content service to augment its regular news service. NBR will be offering an introductory subscription rate for access to this exclusive content for $89 (normal rate $149).
NBR publisher Barry Colman unveiled the new setup in an open letter to subscribers: “As you know, there has been endless discussion for a number of years about the crazy model adopted by newspapers in most parts of the free world in which they pay the enormous costs of running professional newsrooms only to give their content away free –while at the same time slashing newsroom numbers to save money as circulation and advertising revenues fall. It is only a matter of time before the model collapses. The alternative is newsrooms decimated to the point of processing public relations handouts or unedited government propaganda from their fully staffed team of spin doctors.”  [Our aside: some might consider that this moment  arrived some time ago]

The National Business Review (NBR), well used to looking at a variety of business models, is now trying out a new one of its own: a new paid online Subscriber Only Content service to augment its regular news service. NBR will be offering an introductory subscription rate for access to this exclusive content for $89 (normal rate $149).

NBR publisher Barry Colman unveiled the new setup in an open letter to subscribers:

“As you know, there has been endless discussion for a number of years about the crazy model adopted by newspapers in most parts of the free world in which they pay the enormous costs of running professional newsrooms only to give their content away free –while at the same time slashing newsroom numbers to save money as circulation and advertising revenues fall. It is only a matter of time before the model collapses. The alternative is newsrooms decimated to the point of processing public relations handouts or unedited government propaganda from their fully staffed team of spin doctors.” [Our aside: some might consider that this moment  arrived some time ago]