The Australian is to adopt a "freemium" model in October, becoming the first News Limited-owned masthead to charge readers for journalism on its websites, with the Daily Telegraph and The Herald Sun set to follow.
Digital subscription packages will roll out in October. Originally, News Limited had penciled in a September start. The freemium subscription model will offer readers to access a combination of free and subscription-only content, while non-subscribers will be able to read general content across the website and m-site.
News Limited is hoping the freemium model will allow The Australian to retain its online traffic and the valuable display ad revenue it attracts.
The chief executive of The Australian and News Digital Media, Richard Freudenstein, unveiled the plans today with an interview in The Australian, in which he blasted media commentary about paywalls as “ill-informed”.
He said the strong criticism of News Corp's paywall strategy at The Times was wrong: "The rise in digital subscriber levels is more than offsetting declines in print circulation," he said.
"Here is the important bit - they are making more money from their 79,000 digital subscribers than they did from the 20 million browsers they had before."
Freudenstein said The Australian's paywall strategy, which is similar to The Wall Street Journal, was possible because local mastheads generate more ad revenue from online advertising. "We make a lot of ad revenue from our websites and that revenue is growing, so we want to get the balance right," he said.
"We've also come to the view that we think it is important as a marketing tool to drive people to the free part of our site and then use that as a way of upselling to the paid site."
In another reference to the UK market, Freudenstein said the ad model was "very different", given yields had fallen dramatically, and noted the global popularity of the The Daily Mail, which recently opened an office in Sydney.
"The Daily Mail is, I think, now the second-biggest news website in the world, with 60 million unique visitors a month, and my understanding is that they generate £15 million ($22.9m) revenue per year, which is significantly less than our websites in Australia generate off much, much smaller audience numbers," he said.
In terms of The Australian's relationship with search engines, and more specifically Google, he said: "Our stories will be available on Google and there may even be a first-click-free model which is what The Wall Street Journal does." Freudenstein said. A new website will also allow readers to share stories behind the paywall through Facebook.
Freudenstein said publishers needed to re-evaluate their role, drawing a comparison with the pay-TV business, “which is not just great at content but great at marketing".
Freudenstein suggested there may also be a free trial period. "There will be one subscription, one log-in across all platforms and no hassles," he said.
A full digital subscription will enable access to The Australian’s entire website, iPad and Android apps, and m-site for $2.95 per week.
Six day print subscribers will receive a full digital subscription, and pay $7.95 a week. A new full digital subscription plus The Weekend Australian print edition is priced at $4.50 a week. Existing six day a week print subscribers, who pay $6.95 per week, will receive a complimentary digital subscription.
The Australian will also launch a redesigned website and a new ‘m-site’, designed a site specifically for mobile phones, in tandem with the pay wall.
In a statement from News Corp., Freudenstein added: “We believe that The Australian journalism has real value online as well as in print, and extensive research suggests our readers agree.
"The introduction of subscription packages will not only open up a new and important revenue stream, but also give us a much closer, more valuable, relationship with our most loyal and engaged readers.”
News Limited claimed that at least 50 newspapers around the world have begun charging for online journalism since 2009.
AdNews reported yesterday that News Limited was on the brink of unveiling paywall plans for The Australian.
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