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#wef12: CEO of Australia’s Fairfax Media encourages publishers to make ‘the big calls now’

September 4th, 2012 | No Comments | Posted by in Business, Newspapers, Online Journalism

The Sydney Morning Herald is one website which will see a paywall introduced

Earlier this year Australian publisher Fairfax Media announced what it described as ‘landmark’ events, including the introduction of a digital-first editorial strategy in Sydney, Melbourne and Canberra, as well as a paywall in front of its Metro Media digital content.

The strategy followed a 12-month review, which concluded a need for “decisive action to restructure our business model to better reflect audience and advertising trends”.

This included cost cutting measures such as the loss of 1,900 members of staff in a bid to make savings each year of $235 million AUD, within the next three years, according to a report by one of Fairfax Media’s metropolitan titles the Sydney Morning Herald.

At the time chief executive of Fairfax Media Greg Hywood said:

No one should be in any doubt that we are operating in very challenging times. Readers’ behaviours have changed and will not change back. As a result, we are taking decisive actions to fundamentally change the way we do business.

The changes announced today have been selected after considering the merits of a full range of structural alternatives, including a demerger. The package of strategic initiatives is bold, and several are difficult, particularly as they will impact on some of our people.

However, we believe that they are in the best interests of Fairfax, our shareholders, and ultimately the majority of our people. They are necessary to ensure Fairfax retains its position as a leading independent media company and a key voice in our markets.

It is now a couple of months since the announcement was made and on Monday (3 September) Hywood spoke at the World Editors Forum in Kiev in detail about the restructure, and where it is hoped it will take the company in the next few years.

Hywood said the company was facing the same external pressures and declines as other media business and decided to respond by building a “platform or technological-agnostic” model.

And the company is “within reach of a very different profitable model for journalism focused primarily on digital distribution”, he said.

During his presentation to the conference he also called on other news outlets to “make the calls, and make the calls now”, in order to develop a “dominant digital news position”.

At Fairfax Media such big calls have included a move for two of its metropolitan titles – or mastheads as Hywood refers to them – SMH and The Age, to a compact format next year. The company is also closing down two large printing plants and moving the work to its regional plants.

In the newsroom there has also been a “revolution” he said, with the newspaper placed “at the end of the process”. Meanwhile sales teams are focused on offering “one media solution for each advertiser”, rather than going in with individual solutions per platform.

And while Fairfax Media is making these significant changes to its business, Hywood thinks other news organisations should also be reassessing their situations.

One day… it won’t be profitable to print any more. Then what you do is turn the digital tap on, what drops out is the entire costs of the manufacturing business underneath it.

As outlined in the ‘Fairfax of the Future’ strategy earlier this year, the company believes that implementing the changes it is will give it “significant flexibility to adjust the business model to reflect audience and advertising trends” should they change in the future.

But “you’ve got to make the big calls now”, he warned.

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#wef12: WSJ’s Raju Narisetti on ‘copycat’ paywalls and the ‘golden’ future of digital advertising

September 4th, 2012 | 1 Comment | Posted by in Business, Online Journalism

Raju Narisetti from the Wall Street Journal, pictured speaking at the news:rewired conference, earlier this year

Speaking at the World Editors Forum on Monday (3 September), managing editor for the Wall Street Journal’s digital network Raju Narisetti said he had concerns about many US “copycat” paywalls, and whether they would be able to generate the necessary revenues to succeed financially.

Instead, he predicted that “the golden age of digital advertising lies ahead of us” and that by “running towards paywalls” news outlets may be missing the challenges of the future, such as the mobile consumption of news and the need to produce content which can travel with its advertising to platforms outside the news outlet’s own.

I caught up with him after the session to speak to him more about his views on digital business strategy, “copycat” paywalls, and why he thinks smaller news brands shouldn’t be “throwing the advertising baby out with the bathwater”.

I think most US metro papers are looking at the New York Times and saying let’s follow their model, whether it’s 20 free stories or 30 free stories, it’s a metered wall, and I think the New York Times has seemed to have pulled it off but I think a lot of smaller papers will find that the content they have is not going to be enough for people to want to pay.

My worry is that you’re throwing the advertising baby out with the bathwater saying ‘oh advertising rates are falling, it’s a no-win situation’. As you saw, as an entire global industry, we only get 2 per cent of digital advertising, so my concern is why are we not focusing on the advertising end of the business which is … much larger and is growing, rather than focusing on the subscriber end of the business where we’re going to have a much harder time convincing people to pay for content?

News outlets should instead be asking “how should I expand the pie?”, he said. Narisetti added that part of the opportunity in the digital advertising business will require news organisations to do more to understand audience interactions with adverts.

As an industry we know our readers very well, we know what they do what, what they read, where they come from. Why is it that we haven’t invested enough to know how they interact with advertising and taken advantage of that?

He said some news outlets have “abdicated the responsibility of understanding their advertising behaviours and then taking advantage of that”.

Instead, “we’re just selling eyeballs as opposed to selling our knowledge of our reader behaviour”.

We know so much about what they consume … why don’t we know what advertising works for our readers then? We’ve just ignored that.

So why does he think news outlets without that are moving in the paywall direction? Factors include a “me too” mentality, he said, where news outlets see another succeeding and want to try it too, in other cases it may be seen as a “defensive mechanism”, he said, “to say it will stop people migrating from our print to our website”.

But this could be missing a bigger issue, he warned.

My point is that increasingly readers have the opportunity to be more and more promiscuous because technology allows them to go anywhere …

While we’re all on a journey of different speeds on, say, this information highway, there’s probably going to be a big mobile wave coming behind that will put all of us in a relatively level playing field. How do you monetise mobile… how do you create stickiness, is something we should be thinking about now rather than worrying about our website which are increasingly seeing fewer and fewer people come.

… I’m not sure we’re going after the right set of problems.

The Wall Street Journal “never gave its content away for free”, so it does not face the challenge he has highlighted for others of trying to charge for content that was once free. And of course other paywalls are also seeing success, but his argument is that digital advertising is far from being fully maximised and paywalls should not necessarily be the first answer for everyone.

If you have a paywall that’s working, more power to you, but if you’re going to jump in feet first or head first, think a little about what’s going to work rather than just saying the [New York] Times is doing it, let me follow.

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#wef12: 5 steps from New York Times Company on building digital subs model

September 3rd, 2012 | No Comments | Posted by in Business, Newspapers, Online Journalism

The latest results reported by the New York Times Company showed a total of more than 500,ooo paid digital subscribers. This was an increase on the 454,000 paying subscribers recorded a year after NYT.com launched its online subscriptions model, which refers to subscribers across the New York Times and International Herald Tribune.

And this is not including the 700,ooo print subscribers who also gain digital access to the company’s content, according to New York Times Company vice chairman Michael Golden.

In fact a report published last month, as covered by AllThingsD, predicted that the New York Times “will have more digital subscribers than print subs within a couple of years”.

So when Golden took to the stage at the World Editors Forum today for a session on ‘how some newspaper companies are succeeding’, his presentation was unsurprisingly focused on digital subscriptions.

We were laughed at we were scorned … after the launch here’s what we’re seeing now, people are saying it’s a great success

He said the introduction of digital subs at the New York Times has boosted staff morale: it has “changed the way people walk around the building”, he said.

So for others keen to also build a digital subscription model he offered these five steps:

  • Be very clear on what you’re doing

Golden said the company spent much time studying this, and what their overall goals were, such as”to develop a significant revenue source because our business model demanded it”.

The aim was also to build a “one-to-one digital relationship with consumers and protect digital advertising”.

  • Align the entire organisation around it

It “cannot be an editorial project alone”, he said.

  • Remember readers know what they want

Audiences are indicating every day what they do or do not want to read, and on what platform they like to consume it.

He added that the launch itself is “incredibly important” within this: it will either “create momentum or lack momentum” he said.

  • Think and act like a digital company
  • And finally, continue

He spoke about the ways publishers can work to continue to increase subscriptions, such as the Times’s ‘Most Engaged User’ initiative which rewarded the most engaged subscribers.

Its move from a “gateway” of 20 articles a month to 10 articles a month also helped it see “another boost in subscriptions”, he added.

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#MarketBriefing: How the FT is measuring its shift to mobile

Multichannel analytics is key for the Financial Times, which is well known as a leader in understanding its audience and using the data to increase revenues.

The FT, which has 4.5 million registered users of its digital offering and 285,000 paying digital subscribers, has a team of 30 people focusing on web analytics, data and digital marketing for the title.

The digital subscriber base grew by 29 per cent last year, demonstrating how understanding the audience pays off.

Why audience analytics is key

Tom Betts, head of web anaytics as the FT, told today’s ‘audience revenue tools for online publishers’ conference how it has grown its subscriber base and used data to help “fuel” their shift to mobile.

One of the things the FT has been doing for the past two or three years, Betts said, is personalising the communications with readers based on the types of editorial content they are are interested in.

The FT looks at customer DNA, at how much of each type of content, such as “markets”, “world”, “personal finance”, they read.

The FT can then tailor newsletters “to personalise the experience that people have with us”, Betts explained.

How mobile alters the digital landscape

But simply looking at digital analytics is not enough. Platform-specific data can give a better picture of the individual.

For example, Betts explained how if a reader has not read “weekend” or “personal finance” content online, it might be that they read it on a tablet or mobile when they are at home.

Mobile is altering the way our customers read our content.

And this information can turn into revenue. At least 20 per cent of new FT subscriptions comes from behaviour-driven data marketing, Betts said.

He also said it is essential to understand whether if people are engaging across platforms.

“Are the platforms generating a new audience or are we just moving the audience from one platform to another?” Betts asks the data, as that will dictate how much it is worth investing in digital offerings for different devices.

The FT famously created a web app in order to have a direct relationship with the customer, which it was not able to do with its previous iOS native iPad app.

As well as providing data from the web app and bypassing Apple’s 30 per cent levy, the technology behind the app also makes “deployment easier”, Betts said.

“HTML5 makes deployment easier” as the “core remains the same with different wrap-arounds” overlaid for the Android and Windows 8 native apps.

And looking at the data demonstrating when the various devices are used is also beneficial.

Betts demonstrated with a graph to show the main smartphone and tablet usage peaks at breakfast, with another rise in the evening.

Existing subscribers are not just reading during the business day.

They therefore get better value of their subscriptions and less likely to cancel.

Update: This post initially quoted Tom Betts as saying “everything we’ve done that has been successful at the FT has been related to data”. The FT would like to clarify that Betts was referring to the fact that “the intelligent use of data has been a significant driver of our commercial success”.

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#MarketBriefing: ‘80% of digital revenue comes from your loyal audience’

June 20th, 2012 | No Comments | Posted by in Business, Paid-for content

Eighty per cent of a typical news site’s digital revenue comes from their loyal, returning audience, those the publisher has an email addresses for, with 20 per cent of revenues coming from flyby users.

But 80 per cent of traffic comes from the flybys who generate the minority of the revenue.

The statistics, which are unlikely to come as a great surprise to many publishers, were shared at today’s ‘audience revenue tools for online publishers’ conference by Matt Shanahan, SVP strategy for Scout Analytics, one of the data tools discussed at the event.

Shanahan talked of the positives and negatives of revenues from print versus digital.

He said the main difference is that print is based on “distribution” whereas in digital, publishers get paid for “usage”.

Outlining the negatives of shifting to digital, Shanahan said publishers can expect “to chop in half” revenues. Meanwhile, there is a need to sell more ads, he said.

One of the many positives, Shanahan said, is that with analytics “you know what people are reading”.

Shanahan therefore encourages publishers to focus on analytics and to segment the audience by revenue. Scout Analytics calls it “revenue-weighted behavioural segmentation”.

A publisher should:

  • Look at what editorial is generating the most ad revenue
  • Ask ‘can readers be converted to subscribers?’
  • Look at what usage profiles have most event revenue potential
  • Look at audience development and what sources have the highest lifetime value

He says those who dig into the data in this way can “grow revenues by 200 to 500 per cent”.

“An anonymous audience is an anchor,” Shanahan said, explaining the value that comes when a publisher has an email address for a reader.

He showed statistics to demonstrate how a registered audience will “always be much smaller in number” but showed how they generate far more revenue for the publisher.

Shanahan said that “even if you have a registered user it doesn’t mean they come everyday”. But if you have their email address, you still get to market to them.

And loyal readers have the same conversion rate as those who do visit the site every day, he said, when marketing daily deals by email, for example.

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#GEN2012: ‘If journalism isn’t there to protect people, people get hurt’

May 31st, 2012 | No Comments | Posted by in Business, Events, Online Journalism

Monetisation of digital journalism, described earlier today as the “elephant in this room” by CNN’s Peter Bale, formed the basis of an afternoon session at the News World Summit in Paris today, with a focus on financing investigative journalism.

There was no dancing around the importance of the issue. As Howard Finberg of the Poynter Institute put it:

The challenge, as Paul [Steiger] pointed out, is if we don’t do this people die. If journalism isn’t there to protect people, then people will get hurt.

This is not just a matter of economics to keep jobs, this is about economics that support democracy.

I feel passionately that we need more experiments, more subscription models, more donation models. We also need to figure out how we can tell the public the value of investigative journalism … even if they don’t support if financially they can support it in other ways.

He called for more creative solutions. Online it is “going to be increasingly difficult for traditional media”, adding that recent figures showed 68 per cent of online display advertising in the US controlled by the five big technology firms.

Our difficulties are fairly well documented so we need to start looking for some solutions that are different.

Also speaking about the issue on the panel, ProPublica founder Paul Steiger said he expects the decline in print advertising accelerate, “so the challenge of getting more and more revenue from online is going to be greater rather than less”.

He said ProPublica, which is funded largely by donations, is “looking at the possibility of subscriptions, but we need to make all of our stuff accessible and so the challenge is to figure out to how to keep in the conversation and how to find a variety of sources of revenues.”

He added that investigative journalism is significant for democracy and therefore “worth supporting in multiple ways, including charitable contributions”.

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Johnston Press delays reporting financial results as it negotiates with lenders

March 28th, 2012 | No Comments | Posted by in Business, Local media

Johnston Press has delayed the reporting of last year’s financial results while it negotiates with lenders.

The local news publisher of around 260 titles, which is based in Edinburgh, was due to report its full-year results for 2011 on Tuesday (3 April).

It is describing discussions with lenders as “constructive”.

In a statement JP says it is changing its preliminary results date to 25 April.

The company has been in constructive discussions with its lenders regarding the extension of its credit facilities for a further three years from their current maturity on 30 September 2012 and will provide a further update to the market as part of the preliminary results announcement.

Last week Ashley Highfield, who started as JP’s chief executive in November signaled that the publisher is adopting a “digital first” strategy.

During the same appearance, at the Guardian Media Summit, he stated that “every one of our newspapers is profitable”, but added that to “make more money out of digital we still have a long way to go”.

He said the local newspaper group aims for profit margins of 20 per cent.

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Is CNN about to buy Mashable?

March 12th, 2012 | No Comments | Posted by in Business

Reuters is reporting that CNN is expected to buy social media and technology site Mashable for more than $200 million (£128 million).

Felix Salmon, a Reuters blogger reporting from the annual South by Southwest technology conference held in Austin, Texas, says in a video posted last night (Sunday) that the broadcaster is expected to make an announcement tomorrow (Tuesday, 13 March).

In the video Salmon states:

Mashable is this huge website, it’s got the same kind of consumer focus that CNN does, it’s not aimed for the tech insiders, it’s aimed at the masses.

Mashable was set up in Scotland by Pete Cashmore who was then 19. It now has bases in New York and San Francisco and has more than 20 million monthly readers, according to the Reuters video.

However, paidContent suggests that a deal is far from being announced and suggests the story based on Salmon’s single, unnamed source is merely rumour.

Staci D. Kramer writes:

A source familiar with the situation describes the report of a deal as a rumour and tells paidContent no announcement is scheduled.

Well-known acquisitions of online-only news sites include AOL buying TechCrunch, and its Huffington Post purchase last year on which is spent £195 million.

CNN responded to a request by Journalism.co.uk for comments saying:

We do not engage in speculation about our business and we aren’t commenting on these reports.

Salmon’s video is below:

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#ftmedia12: FT content revenues could overtake advertising in 2012

March 7th, 2012 | 1 Comment | Posted by in Advertising, Business, Journalism

Image copyright Chris Young/PA

This year “could well be” the first year in its history that content revenues, including print and digital, overtake advertising revenues at the Financial Times, its chief executive, John Ridding, told the news organisation’s Digital Media Conference today.

The latest figures show content revenues for the FT accounted for 41 per cent in 2011, while advertising revenues accounted for the majority.

Speaking on a panel debating “the future of digital journalism and news”, Ridding said the FT’s relationship with its readers has helped to “sustain” quality journalism.

Having that understanding about what readers want is very helpful in continuing to improve the quality of journalism we provide.

We are confident in the business model and confident it will not just sustain quality journalism but enable us to further build quality journalism.

The site currently offers free registration which gives users access to eight articles a month, after which they would need to pay a subscription to access further content.

During the panel Ridding also spoke about mobile, which he said has been “a complete game-changer” for the FT.

One of my issues to start with was will the kind of content we do work on mobile? The answer is yes.

He added that one question to consider is whether there are ways publishers can reach out to “large continental economies” via mobile and tablet devices, such as by using “incentives … to stimulate that demand”.

Last month the FT’s parent company Pearson reported in its end-of-year results that FT Group revenues increased by six per cent to £427m in 2011.

Digital subscriptions to the FT were said to be up 29 per cent year-on-year to 267,000 and registered users on FT.com had risen by 33 per cent.

Last week paidContent reported that “in the US, to where its online chief recently relocated, digital subscriptions have now overtaken print subscriptions”.

The interview with Riddings also revealed that content revenues are expected to overtake ad revenue in 2012.

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Note to staff from News Corp’s Rupert Murdoch in full

February 17th, 2012 | No Comments | Posted by in Business, Journalism, Newspapers

The note from News Corporation chairman Rupert Murdoch to staff, which announces the due launch of the Sun on Sunday and the lifting of suspensions, in full:

Dear colleagues:

I’ve worked alongside you for 43 years to build The Sun into one of the world’s finest papers. It is a part of me and is one of our proudest achievements.  The Sun occupies a unique and important position within News Corporation.

I have immense respect for our heritage, your exceptional journalism and, above all, you, the talented women and men who work tirelessly every day to ensure our readers have access to such a trusted news source. I believe this newsroom is full of great journalists and I remain grateful for your superb work and for the stories you uncover to inform and protect the public. None more so than over the last three weeks.

My continuing respect makes this situation a source of great pain for me, as I know it is for each of you.

We will obey the law.  Illegal activities simply cannot and will not be tolerated – at any of our publications. Our Board of Directors, our management team and I take these issues very seriously.

Our independently chaired Management & Standards Committee, which operates outside of News International, has been instructed to cooperate with the police. We will turn over every piece of evidence we find — not just because we are obligated to but because it is the right thing to do.

We are doing everything we can to assist those who were arrested — all suspensions are hereby lifted until or whether charged and they are welcome to return to work. News Corporation will cover their legal expenses.  Everyone is innocent unless proven otherwise.

I made a commitment last summer that I would do everything I could to get to the bottom of our problems and make this Company an example to Fleet Street of ethical journalism. We will continue to ensure that all appropriate steps are taken to protect legitimate journalistic privilege and sources, which I know are essential for all of you to do your jobs. But we cannot protect people who have paid public officials.

I am confident we can live by these commitments and still produce great journalism.

We will build on The Sun’s proud heritage by launching The Sun on Sunday very soon. Our duty is to expand one of the world’s most widely read newspapers and reach even more people than ever before.

Having a winning paper is the best answer to our critics.

I am even more determined to see The Sun continue to fight for its readers and its beliefs. I am staying with you all, in London, for the next several weeks to give you my unwavering support.

I am confident we will get through this together and emerge stronger.

Thank you,

Rupert Murdoch

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