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Paywall inevitable – Herald boss

A paywall for the Herald website is inevitable, says its publisher's CEO.

The APN newspaper launched a new-look website last night, and its tabloid format in print this morning.

“I think inevitable somewhere in the future there’ll be a paid model for online,” APN CEO Martin Simons said on TVNZ’s Breakfast this morning, echoing recent comments by Herald editor Shayne Currie.

“In the Melbourne market very similar to Auckland where you’ve got two major publishers, News Ltd has moved to a paygate and we’re looking at that and I think inevitably we’ll get there at some stage,” Mr Simons said.

Asked if a paywall would happen in the next three to five years, Mr Simons replied, “Possibly in that sort of time frame. It really depends. The world is moving to that sort of space.”

He added, “I think as newspapers around the world become challenged, you do have to find a mechanism to pay for the journalism.”

Tabloid economics
Mr Simons said ad revenue would not be hit by small ad size in the new tabloid print edition. “Generally people who had a full page in the broadsheet are going for a double-spread in the tabloid. So it’s roughly equivalent.”

This morning, at least, the first two full-page display advertisers (New World and Noel Leeming) had singles.

Hints of a shift in editorial emphasis between print and online were not immediately apparent this morning as both editions led with the same David Bain story.

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Herald paywall inevitable – editor comes clean

Sept 3: It is inevitable APN will put a paywall around the Herald's website, editor Shayne Currie says.

Appearing on the Media3 TV programme at the weekend, Mr Currie was asked about rumours that nzherald.co.nz content would be put behind a paywall next year.

"I think see it as inevitable," he told host Russell Brown. "I can't see it not happening.

"We can't go on in the way we are at the moment," Mr Currie said.

"If we want to fund journalism and keep quality there has to be some kind of monetisation of the internet."

He admitted an early Herald effort at subscriber-only content, focused on columnists, did not work.

"I think New York Times model works best of all of all the models we've looked at overseas," Mr Currie said.  "So 20-30 stories that you might get for free and then pay after that."

The Times began its metered paywall last year by giving readers 20 free articles. It recently tightened that to 10.

Mr Currie added that "we have to take into account what we do for our subscribers that are buying the paper every day, whether they have certain access to the website that others might not", indicating that print subscibers might get a discounted or free or online subscription.

This is a common model for mainstream newspapers overseas. NBR ONLINE, which has largely unique content to the weekly print edition, offers no discount.

Barry Colman, whom on Thursday revealed he had sold NBR to CEO Todd Scott, also featured on the episode (watch it ondemand here).

The outgoing publisher said uptake in NBR ONLINE subscriptions had helped balance a decline in print.

Mr Currie was seen chatting with Mr Colman after filming of this week's Media3 finished on Wednesday night. If it was paywall numbers the Herald man was after, he may have found them encouraging.

NBR recently said it had just under 3000 individual paid subscribers, plus some of New Zealand's largest companies on its fast-growing new IP subscriber programme, which lets all staff in an office access NBR ONLINE without logging on. See the latest member list here.

The New York Times has enjoyed apparent success with paid online subscriptions, but the situation is clouded by the fact print subscribers have the option of taking free digital access.

NBR head of digital Chris Keall says people often put an NBR ONLINE subscription on their work expense account or take advantage of a group subscription bought by their employer.

Others are motivated by the fact paid sites like NBR ONLINE and Consumer.org.nz help them in their work, or help them save money.

Mainstream news is a tougher sell, and more so when so many free options are available. 

Fairfax's flagship metro titles across the Tasman – The Sydney Morning Herald and Melbourne Age – will move to paywall model early next year.

But Fairfax NZ CEO Allen Williams recently told Mr Keall his group has no plans to introduce paywalls for its New Zealand properties, which include stuff.co.nz.

With online ad yields remain miserably low for mainstream news sites, many publishers question whether there is any point to having the most online traffic, Mr Keall says.

Subscriber-based online content at least deliver advertisers a qualified audience, mimicking one of traditional advantages of print.


WHERE'S THE AD MONEY GOING?

Recent advertising trends emphasise the need for online publishers to seek alternative sources of revenue.

Advertisers are following eyeballs online, but favouring search engines, directories like Yellow and classifieds (including Trade Me, 51% owned by Fairfax) over the display ads commonly sold by mainstream news sites.

The AFR estimated Google (which bills Australasian ads to its tax-haven subsidiary in Ireland) sucked more than $1 billion away from traditional media across Australia and New Zealand last year.

Source: Advertising Standards Authority. Click table to enlarge.

Source: IAB. Interactive = internet advertising. Click chart to enlarge. 

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Comments and questions
28

"With online ad yields remaining miserably low for mainstream news sites" -- I think this rather subjective statement requires some context, because I'm not sure I believe it.

Advertising money has followed people online, and internet advertising is growing faster than other categories.

However, the big majority of online ad spend is captured by search engines (that is, Google), directories and classified (Trade Me, Seek etc).

Compared to what used to be spent by advertisers in print newspapers, mainstream news sites are left with crumbs.

Stuff is easily the most trafficked mainstream news website in New Zealand, yet last year it captured (by one insider's account) $10 million of the $328 million spent by advertisers online. For folk in the mainstream media camp, that's a scary stat.

I've added a couple of tables to the bottom of the article above that details these trends.

Premium sites will deliver premium CPM's. As long as your audience is very desirable to advertisers and it's difficult for them to find that reader somewhere else your product will be in demand. As always quality trumps quantity.

The truth is, generalist news is the ones that are going to have a hard time. Our niche publications command ad space at up to 100x that of a general newspaper. Why? Because it's a valuable audience that someone want to connect with.

Newspapers talk to nobody in particular. Nobody will ever pay a premium for that.

NBR's charging for news works because the news it by and large provides is seen as better quality journalism. I find it useful as business intelligence, and so it plays a part in me doing better business.

The problem for the Herald is that so much of its news is murder, car crashes and petty political stuff. While it might be interesting to read, it doesn't help me make money, so by and large, I don't see why I need to pay for it when I can get the news from a variety of sources for free (including web based news aggregators).

NBR Online works because it's good and because the news and insights are insightful and financially useful. You understand your niche. Whereas the Herald understands "lowest common denominator". Good luck in getting the lowest common denominators to pay up in significant numbers.

Certainly one advantage of a paywall is it focuses reporters on the fact revenue can be generated by editorial - incentivising journalists to write hard news that people will pay for (rather than pandering to advertisers or rewriting press releases).

The analogy I always use is HBO, which produces better quality content than most free-to-air, ad-funded networks.

Of course, life isn't quite that simple, because most paywall sites also run ads and/or sponsored sections (which among other things pile on the pressure to build page impressions). But it's an interesting element often overlooked by paywall critics.

The Herald compared to the New York Times hahahahaha

The Herald is another perfect example of the supposed experts within failing to adapt their business model to a range of alternatives. While the whole debate of paywalls rage, there is a glaring opportunity still out there. Folk like to pickup a paper and read, the problem is the Herald and all the local rags both free and paid for delivered (occassionally) contain so many ads they should arrive in the mailbox for free. Yes - I am guilty along with many others I suggest in at least glancing through junk mail. I find it strange that folk will queue up and pay an entry fee to Home Shows for example to see companies advertise their goods, same goes for Newspapers. If the herald arrived in my box free, I'd read it. As a newspaper it fails due to the lack of incisive journalism therefore my $ go elsewhere.

I used to but the Herald but stopped when I worked out that over 50% of the paper was advertising. Sort of came to the conclusion that perhaps they should be paying me for reading it.

If the Herald wants to charge people for its website access it will need to provide one that actually works properly.

It is currently failing to show any comments on its current opinion articles. This is even after they have apparently passed through the usual arbitrary bottleneck of its moderation. It is quite common for its Opinion page to show numbers of comments against each article that are not available when you view the article. It is even more common for comments to be grossly delayed or discarded though the article is not marked closed for comments. This is simply contemptuous of commenters time and effort.

Agree 100%. The Herald does not like opinions different to those of its chosen columnists.

..."cannot continue delivering quality content"! The Herald is a currently a tabloid. Perhaps with funds from advertising it will START delivering quality content.

Erecting a paywall won't pull in more revenue, the NZH doesn't have a monopoly on the news. The editor is deluding himself, if he thinks otherwise. Or he's smokin' something that he shouldn't.

Let's get the quality content and correct spelling first. Then think about paywall

The Herald? Quality journalism? Well that is my laugh for the day.

The vast majority of their so-called journalism is reprints of articles from the Independent and the Guardian, press releases from pollies and Greenpeace and coverage of fashion and music.

When was the last time the Herald had a "big scoop" bit of news based around investigation that their journalists had carried out? Even better, when was the last big scoop that actually turned out to be true?

I couldn't agree more.

Also, if you actually go onto sites like 'Scoop' and other NZ press release sites you find most online newspapers are just parroting the press releases others have left. There is very little journalism going on in New Zealand.

When the Herald moves to paywall they will simply lose customers as most,if not all, of their content can be found free on other sevices.
the only way to stem the (outward) flow will be for Herald to make a dramatic improvement in the quality of it's journalism.

Ill just read stuff.co.nz if herald goes paywall

I think it is simple, package up the friday and weekend papers(actual ) with an on line function. If you dont have package no access or you pay.

100% delusion

The new site is no more improved than the old dogs breakfast. Compare it to stuff.co.... Worlds apart

Im hoping that google will filter the 'pay to read' pages out of my newsfeed. The herald is definitly not worth paying for. Citing NY times and NBR as examples is a joke. Those papers have actual journalists publishing intelligent reports, not junk paper tabloid national party mouthpieces for reporters like NZ herald. Its been a rubbish paper for a long time, and the bias on articles published is unaceptable and a long way from what Id call jounalistic integrity.

i simply predict that once the pay wall goes up users of the nzherald website will switch to stuff.co.nz

I already do - its a far better website and the news is both more comprehensive and more timely.

The new format simply reinforces my thoughts that I really MUST cancel my Herald subscription - Stuff is a far better source of REAL news both national and international - and if I want tabloid, I'll go Truth, Sunday News or, god forbid, Herald on Sunday

I don't know what the Herald has done to the font for the on-line content, but it's virtually unreadable.

As for accuracy of content, it's appalling. Like yesterday, when the headline screamed 'Murray wins US Open final', still there hours later.

The Herald is the author of its own fate. I could have once been described as the Herald’s most desirable customer and advertiser. As a reader, I have purchased the Herald religiously for as long as I can remember and until recently, ran advertisements in every publication for a period of around 14 years. In its wisdom and without consultation, the Herald chose to change the wording of my ad, which altered the position of it in the paper. No matter how much I protested, they refused to reinstate the wording, saying they had changed their policies. Even a letter to the MD failed to elicit a response, so I stopped advertising in it. With the ever increasing OTC purchase price, most people can no longer to afford to buy it, and I have also since ceased purchasing it daily, save for Wednesdays and Saturdays. As someone stated above, the Herald would be better off been a freebee, as local rags (eg Couriers) etc are free and generally provide a reasonable return for my advertising dollar. I have run the same ads in the Courier for x 16 years as, as I did previously in the Herald. In other words, if the Herald was a freebee, I would advertise in it again, but until then, never again. It follows then, that I would certainly not for on-line content, and i don't think any of its mainstream readers would either

Mr Currie's use of the Melbourne newspaper market as an example is as out of date as he would be out of luck should he try the same thing here...see link below

http://mumbrella.com.au/news-set-to-review-paywall-strategy-113490