With The Sun and Telegraph websites moving behind subscription services later this year, the UK newspaper industry remains divided on the balance between ad-funded editorial and paid content. Last month, subscription software firm Zuora assembled key industry figures from News International, the Financial Times, IPC, Fairfax and Pearson to discuss the future of the publishing industry and the emergence of ‘Paywall 2.0’.
Panel guests:
• Christina Scott, CIO, Financial Times
• Tom Hall, VP Education Technology Partnerships, Pearson
• Neil Robinson, Digital Director, IPC Media
• Andrew Lam-Po-Tang, Chief Information & Technology Officer, Fairfax Media
• Katie Vanneck-Smith, Chief Marketing Officer, News International
• Peter Kreisky, media industry pundit and chairman of Kreisky Media Consultancy
• Tien Tzuo, CEO (former CMO / COO at Salesforce.com), Zuora
The event, held at the Bulgari Hotel London, began with Zuora CEO Tien Tzuo outlining his vision for ‘Paywall 2.0’, arguing that traditional ‘tollbooth’ style paywalls without any digital reinvention risk failure.
Tzuo asserted that publishers need to reinvent relationship with customers through a ‘digital-first’ strategy giving an experience that can’t be offered in print. By exploiting offerings effectively, publishers can unbundle content into a better value proposition, increase geographical reach, and offer compelling deeper, richer experiences.
To view Tzuo’s full presentation, see the Slideshare presentation below:
Commenting on the perception of subscriptions, Andrew Lam-Po-Tang, CIO, Fairfax Media, felt that the term ‘paywall’ was a harmful term that failed to communicate the benefits of subscription. He thought publishers need to focus on nurturing customer relationships when implementing premium services.
Fairfax Media has set a midyear deadline for the introduction of an Australian paywall for its websites of The Sydney Morning Herald and The Age, as it trials a 10 free article “meter” and $15 a month online subscriptions for many of its overseas readers.
“We’ve seen a drastic drop in advertising revenue over the past five years. Putting a paid strategy around some of our digital content was a critical step in helping us to not only survive, but to thrive in today’s digital economy,” he added.
The Financial Times has pioneered the concept of paid news content online, and CIO Christina Scott said the title had successfully capitalised on its position as a relatively niche product in the business new sector with a highly engaged and affluent audience.
The FT.com has been has been running online subscriptions since 2001, and Scot said it “always put customers at the centre of relationships”. Total FT Group revenues were up 4% last year, with combined paid print and online circulation rising to 602,000, with digital subscriptions exceeding print circulation for the first time in 2012.
The FT site sits behind a paywall, and whilst you can try it for £1 for the first month, £9/week gets you full access to all the digital content across Web and mobile, while £10 and £12 monthly subs get you add-ons such as print copies. Scott added that the firm was now looking at boosting its social media and mobile presence, with possibilities of a Flipboard partnership on in the near future.
Meanwhile, News International has faced a different challenge, with a wide variety of news titles for different audiences.
Speaking about how the media giant approached digital, Katie Vanneck-Smith, CMO, News International, said: “Customers are happy to pay for products and services they value. Our paid content strategy is no exception.” In the UK, The Times went behind a paywall back in 2010, but The Sun is a different proposition, with early plans based around premium football content (such as a Euro 2002 premium offer) proving succesful but failing to launch a wider paid-content initiative.
However, as technology grew, The Sun developed one of the UK’s largest casual betting sites with Sun Bingo. The current move towards charging for The Sun online follows the signing of a deal that will allow it to offer Premier League football highlights and goals. The Sun has not revealed exact plans for its forthcoming pay model, but it will be introduced later this year.
Publisher Pearson also saw a huge shift in the market following the advent of digital. Tom Hall, VP Education Technology Partnerships at Pearson said he noticed how technology advances meant that its Education book competitors took in international publishers alongside rivals in the UK.
“The digital era has brought with it the opportunity for us to redefine our relationship with our customers and the developer community,” he said.
Neil Robinson, Digital Director, IPC Media said its roster of popular magazine titles faced challenge online, in convincing customers to pay for something they were previously getting for free. Robinson said the firm identified where added value could be generated by bundling content through related magazines and offering bonus products based around interests.
Peter Kreisky, media industry pundit and chairman of Kreisky Media Consultancy, looked at how, pre-internet, the media industry was run by a small group of highly influencial media moguls, but since the advent of digital publishers, the balance of power has shifted to a much wider set of industry leaders.
He added that publishers now need to expand their view of their ‘customer’, whether defined by one subscription or one page view and adjust their business model to cater for this accordingly.
“The reconstruction of the media industry started three years ago with a handful of pioneers validating the idea that people will indeed pay for high-quality content accessed across a range of devices from a trusted brand,” concluded Kreisky.
View a Guardian video outlining Zuora CEO Tien Tzuo’s opening presentation here.
Source: http://www.zuora.com/