What is the launch date?
Why are you doing this?
Firstly, we believe in the value of our journalism. We don’t think it is unreasonable to charge for it, even if there are free alternatives.
Our audience research suggests there is a large number of people who also see a value in it, and are willing to pay for it, so long as it is delivered to them in a time, manner and price that works for them.
Secondly, online advertising yields are not, on their own, enough to pay for quality journalism. Every newspaper in the world is facing this reality.
Some say that if only we could build enough traffic, we’d get the revenue. But if you look at the number one news websites in the world – the New York Times – it launched its own digital subscription service, so clearly it doesn’t think that big traffic is the answer.
Why should people read your site when they can get the same content, for free, elsewhere?
Well, that’s our job – to make sure the content we provide is good enough and unique enough that people will want to pay for it.
That’s no different to our newspapers – people can get news for free from TV or radio, but they choose to buy our newspapers because they see value in them.
We are encouraged by our experience with the Herald Sun’s iPad app.
Until we launched the iPad app in October 2010, you could get all the same content – more in fact – for free, on the same device, through the web browser. And yet thousands and thousands have been willing to pay for the app. Why? Because it fits their life – it gives them what they want, when they want, for a price they think is reasonable.
There are many other examples of people paying for a product, even when there is a free alternative – water being the prime example.
Why do people pay for bottled water? Because it suits their lifestyle – it’s cheap, readily available and portable.
What makes you think people will pay?
News Corp has done a lot of research, in Australia, the UK and USA, and we’ve seen lots of research from independent companies. Everything tells us that if we get the product right, people will pay.
For journalism, it is clear that people value, and will pay for, a trusted source to create, edit, collate, curate, package and deliver quality content to them, even when there is a free alternative.
The Wall Street Journal, Financial Times, The Times and Sunday Times and New York Times have all successfully launched digital subscriptions.
We feel that that the ball is in our court – if we get it right, it will be successful.
But many studies show that 95% or more of people say that won’t pay for what they get for free.
If you ask that question, you’re bound to get that answer – who would pay for something they can get for free elsewhere. But nevertheless, we’d love to meet those 5% of people!
The correct question is ‘here is what we’re proposing… would you pay for that?’ We know that we have to create something that people value enough to pay for.
This is not about repackaging the old, it’s about creating something brand new that people will be prepared to pay for.
This is no different to anything else News Corp does – with our newspapers, books, movies or subscription TV.
What is your distinct offering? What are people actually paying for?
Apart from the new-look and improved functionality, our subscribers will be able to access all the content on our website as well as our iPad app and mobile site.
Beginning in March, a series of new products and sections will be launched.
The whole site will be revised with a fresh, clean look and extra interactive functionality and the launch of a mobile site. There will be richer, interactive news and opinion premium content throughout the site developed by a dedicated editorial team.
Live Match HQ – a dual-screen AFL experience that allows users deeper access into AFL stats and commentary
True Crime – a section dedicated to crime in Victoria spearheaded by an exclusive investigator series written by former homicide detective Charlie Bezzina.
What does the digital subscription include?
Full access to the Herald Sun website, mobile site and tablet app.
What content model is the Herald Sun adopting?
‘Freemium’ – a mix of free content and premium (subscriber content) on the website and mobile site. The tablet app is a paid product. This is a similar model to The Australian and The Wall Street Journal. Decisions on free and subscriber content will be made on a daily basis.
How long is the free trial on offer?
A 56 day free trial (that is, two months) will be offered until June 30.
Will the m-site have free and premium content too?
Yes, the m-site will adopt a similar content strategy to the website.
Will my Herald Sun pass allow me to access The Australian premium content?
No. If users want access to exclusive content on The Australian site they will have to pay for it if it doesn’t appear on the Herald Sun site.
How much content will be premium and how much will be free?
There is not a set percentage of premium content that will be created for our subscribers. This will be decided by the editors on a daily basis, but if the content is exclusive to the Herald Sun it is more likely to be treated as premium. Certain high-profile writers will be available to subscribers only.
Content that is “premium” in Victoria on the Herald Sun website will not be able to be accessed free on sister publications’ websites interstate. Readers of thedailytelegraph.com.au, for example, will see the first three lines of a story then be prompted to subscribe if they would like to read more.
It’s a balancing act. We obviously need to protect our display advertising and therefore we need to protect our traffic to a certain extent. Initially, we will err on the side of more free than premium but more will become subscriber only over time.
So the end game could be similar to the Wall Street Journal.
We certainly don’t have all the answers, we’ll play with it, test and learn. That’s the consequence of pushing the boundaries and leading the way.
What is the USP for new content that will be reserved for digital subscribers?
Herald Sun journalists are well renowned for breaking the biggest stories; they have built careers on delivering the news that matters to all Victorians. Premium content will most likely be exclusive and groundbreaking, appealing to all followers of our award-winning journalists. Premium content across all digital platforms will take storytelling to new levels, with new compelling content rolled out from launch.
How will consumers know the difference between free and premium?
Each premium story will have a digital pass icon, which indicates the user needs to be a subscriber to access the full story. If they are not a subscriber the story will show a preview with a message encouraging them to subscribe. The digital pass is an icon adopted by News Limited to depict premium digital content.
Will there be any free passes handed out?
Yes, six and seven day print subscribers will be given a free digital pass as well as any Herald and Weekly Times employee with a payroll number. Also, VIPs will have 12 months of access and there will be 2 month passes being offered to trade and key Herald Sun partners.
How do existing subscribers of the Herald Sun iPad app also subscribe to the website and mobile site?
When a customer’s subscription to our app expires they will receive a message to renew their app subscription which will also mention the Herald Sun digital pass.
Will the Herald Sun be available in the App Store?
Yes. Consumers who want to purchase only the tablet app may do so via the Apple App store.
As a subscriber can I share stories with friends via social networking?
Yes. You can share any story with a friend via email, Facebook, LinkedIn and Twitter. Non-subscribers who are referred to a story via Facebook will be able to read one premium story per day.
Will you be communicating with your existing print subscribers?
Yes. Existing six and seven day subscribers receive a complimentary digital subscription for 12 months, and 2 months will be offered to subscribers on less than six days. They will receive a direct mail communication at launch explaining how to subscribe.
What took so long?
Well, first of all you have to be sure you are doing the right thing. You have to build a business plan, modelling for outcomes that are very difficult to predict.
Then comes the huge task of building the technology. It is easy to underestimate how big a task this is. The technology you need to publish and manage content on a freemium subscription-platform is very complicated. And we had to build e-commerce capabilities, and customer service infrastructure and so on. We’ve had lots of people working on this for many months.
Why are you using the freemium model? Why not do what The Times has done, reserving all content for subscribers? Or, why not do what The New York Times has done, using a metered subscription service? Why not use a ‘pay per article’ model?
The first thing to say is that there are no wrong or right answers and almost certainly not a universal answer for every newspaper.
For us in Australia, our sites make tens and tens of millions of display advertising revenue, that we want to retain. A freemium model gives us the best of both worlds – we want to retain the majority of casual traffic, which drives display advertising, but also build subscription revenue.
Secondly, we think that the free content is a great way to show readers the kind of content they could access if they subscribed.
Online ad yields in the UK are much lower than here and so The Times had much less to lose than we have.
We also thought about the metered and ‘pay per article’ models, but we’re not sure that metered gives the best customer experience for users. They are constantly weighing up whether to read an article or not. We don’t want people to think that way on our sites. We also didn’t like ‘pay per article’ for two reasons – firstly it causes people to be constantly thinking about payments – how many articles have I read today? What’s it costing me? And so on.
We don’t want our readers’ experiences to be shadowed by costs. And we certainly don’t want someone to be annoyed by a bigger bill if they get sidetracked and immerse themselves in our site, reading lots of articles.
Why launch the Herald Sun as the first of the metro mastheads?
There are a few reasons for this:
– It is part of News Corp’s premium content strategy to test and learn.
– This hadn’t been done before on any meaningful scale in mainstream publications, so there are no rules and no answers.
– As you can see News is testing a number of different models, packages prices etc – what we’re doing is different to what The Times is doing, for example.
– We decided to launch one metro title alone so we can take the learnings from that before launching the others.
– The Herald Sun is going first for a few reasons, probably the biggest being they were ready first and because of its position in the market.
– The Herald Sun enjoys one of the world’s strongest newspaper market penetrations with an established community connection. Its connection with Victorians is unbelievably strong. So it was a natural choice to go first.
– Football was also seen as a strong lever in the Victorian market and a potentially key reason for readers to subscribe – hence the need for the Herald Sun to be first off the rank to coincide with the AFL season.
How will the introduction of digital subscriptions on the Herald Sun impact me as an advertiser?
There will be very little change to your ad buys. We do not expect to see a significant decrease in traffic – large amounts of free content will still be available, plus we will be adding new sections for subscribers.
We expect a deeper, more engaged relationship with subscribers and don’t expect there to be any significant drop in traffic; any loss in traffic will be countered by what we expect to be a more engaged audience spending more time with the Herald Sun across multiple platforms.
Will the commercial opportunities differ in form for free and premium content?
No, all standard and non-standard ad placements will be available with free and premium content.
Are you anticipating a decline in traffic?
We have taken many learnings from The Australian that will influence our content propositions to help negate any impact on traffic. We anticipate an increase in certain areas of the site as well as decreases in other areas. The m-site will see a massive increase in traffic which will help maintain our current levels of traffic across our digital content.
Do you see this impacting advertising revenue?
Display advertising is, and will remain, an important source of revenue for us and we will not do anything that will jeopardise it. We don’t believe that we will see any significant decreases in traffic.
Will you be offering different advertising units to digital subscribers?
No, we don’t anticipate any difference between the advertising units served to free visitors or subscribers. Standard display advertising will remain consistent throughout the site.
High-impact advertising units have standard guidelines that will not change or impact premium content areas of the site.
Will your referrals from Google be affected?
Google will continue to index the site. A non-subscriber will be able to view 5 premium stories per day referred from Google. This will reduce the impact of introducing premium content on Google referrals.
Who do you think is going to sign up?
Initially we’re targeting a group we call ‘migrators’.
They are the ones who are long-standing readers of our newspapers, who for various reasons aren’t reading the printed paper as often as they did. They like and value our content, and are happy to pay for it.
We’ve done a lot of research about this group of people – we know a lot about them and we’re confident they will see the value in our proposition.
What targets do you have? Readers? Revenue?
We’re not disclosing our targets, but what I would say is that this is a long term game. We recognise that success is going to take a while.
Do you really think this is going to replace the money coming out of newspapers?
Initially, no. But over time we’re confident that a mix of subscription and advertising revenues will draw significant income.
How is The Times going?
The Times has got over 100,000 digital subscribers, and sign up rates are exceeding the decline in print circulation. So they are actually growing overall subscription and readership numbers. They are making more money from digital now than they were before.
What do you think Fairfax will do?
We run our own race. It looks like they too are going to be introducing form of premium content, but that would be a question for them.
Fairfax recently released some data about digital downloads in its first half year reporting which revealed:
– 430k iPad SMH/Age total downloads – with 50k daily active users
– New AFR pricing model has increased their AFR digital subs from 5k to 14k
– Growth in overall digital rev of 14% H1 FY11 V FY12 – with news websites up 17%.
– Yields on digital metro up 18%
Why did you make the metro iPad apps free? How has uptake been now they are free?
Telstra came to us to talk about sponsoring the apps and we were keen to increase trials, so it was a win-win.
We are very happy with the response since they became free – a lot of people have downloaded them. However, that Telstra offer has now finished.
Are apps breathing new life into print media? Can they save the old media?
Apps, and the mobile and tablet devices they sit on, certainly present a fantastic opportunity for print media.
The content, particularly pictures and video, looks fantastic, and readers can engage with that content wherever and whenever they want. App functionality results in a high-quality reader experience – you can navigate easily and intuitively through content.
That said, it’s too early to say if apps will ‘save’ the print media. Print media isn’t by any stretch of the imagination ‘dead’ and apps have only been around for a relatively short time so their full potential is yet to be discovered.
Additionally, HTML5’s capabilities give all the functionality of an app within a web browser. This means publishers won’t have to create and maintain apps for the all the different operating systems and screen sizes – they will just create one that can be accessed from all devices, and which will render perfectly for each screen size. It also means publishers don’t have to pay commission to Apple.
This is something the Financial Times has done very successfully.
What new opportunities do they provide for advertisers beyond hard copy versions of titles?
Apps provide the best of both hard copy and website worlds. Like print, they will (in time) reach mass, high quality, audiences but like websites they will host video and interactive content which is both targetable and measureable.
Is Apple proving to be an obstacle in enabling publishers to offer advertisers customer data, because it refuses to disclose much information on buyers through the app store? If this is a problem, how can it be overcome?
It certainly is an issue for publishers and one which is sure to be resulting in ongoing conversations with Apple.
Interestingly though, recent research suggests around 50% of consumers will, when asked in the app, happily give their details to publishers.
Have apps fundamentally changed the media business? For example, has the popularity of apps given rise to the recent trend towards subscriber-only content on sites? Are publishers thinking “it’s illogical to charge for one, but not the other”?
As far as News Corp goes, you’ve got that backwards – Rupert Murdoch announced our intention to launch digital subscriptions well before the iPad was announced.
Different publishers are trying different things – some have launched digital subscriptions which cover the web, mobile and tablet, e.g. The Times, some are keeping their websites free but charging for apps, e.g. The Guardian, others have a mix of free and subscription content across web and apps, e.g. The Wall Street Journal.
Is The Daily a failure? It only has 80,000 subscribers and KRM said it needed many times that to break even. Will there be an Australian version?
Again News Limited is playing the long game, profitability will take a few years.
There are some encouraging signs – the majority of subscribers have opted for the $39.99 a year subscription, and churn is low at 1% to 3% a week. Readers are responding well to paying for online content – with 15% of trial readers becoming subscribers.
They are about to launch an Android version, which should increase subscription numbers.
There are no current plans for a version for The Australian.