A glimpse of digital ankle from The Oz

So News Limited and Fairfax Media have now both lifted their skirts slightly on digital subscriptions.

Fairfax led the way last month with some detail around the digital audience for the SMH and The Age. Today News Limited followed with some information around The Australian’s digital subscribers.

If Fairfax lifted the skirt far enough to offer a glimpse of a shapely calf, News Limited is more modest, with perhaps no more than a glimpse of ankle at this stage.  

We learn, I think for the first time, that the initial target for The Australian was less than 30,000 paying digital subscribers. We  know that because the headline in today’s page 2 story of The Australian reveals: “Oz digital subscriber numbers exceed target”.

The paper says that there have been “40,000 subscribers to its digital platforms”. However, that includes 10,000 existing print subscribers who’ve been given a complimentary digital pass.

But what we don’t know is where those 30,000 paying subscribers – come from: they could have bought a print and digital bundle, they may have bought a subscription from within a tablet app, or they may be buying a replica edition. And of those buying a print and digital bundle we don’t know – and News Limited may not either – how many are existing customers and how many are new customers.

That means a single subscriber could be worth as little as $2 – for a single replica edition – or as much as an annual $413 for someone who takes the full $7.95 six day print and digital package and sticks with it all year.

So all we really know is that the 30,000 digital subscriptions are worth as little as $60,000 or as much as $12m to The Australian. For what it’s worth, I suspect the number will be to the lower end of that spectrum.

Prior to these numbers being released, my personal guess was that they might have sold 5000 tablet subscriptions. Which could be worth an initial $72 a year when bought through Apple’s newsstand. That’s a pretty modest $360,000 a year.

Even with advertising revenue against it, it’s not a game changing number.

And it comes on the back of an impressive marketing effort for the iPad app by The Australian including, I think, at least one cover wrap. That’s now been dialled back. Although the number of tablet owners does of course grow daily. But I’m not sure we’ll see more than steady growth from this point.

The paywall launch was more recent with many users still on their free trial, so I suspect those numbers are not yet settled, and indeed may slow down the number of people buying directly from within the app. It would also be interesting to know the percentage of people who convert from free to paying at the end of the three months.

I do not think, by the way, that these numbers will be a surprise or a disappointment to News Limited. I heard one anecdote that some staff ran a sweepstake on how many people would take the digital trial. The numbers, I understand, were bigger than any of them guessed.

But the more data that emerges, the more it starts to feel like tablets – or indeed paywalls – are not going to singlehandedly save newspapers. They’re just going to be one of many revenue streams.

Tim Burrowes

 

Comments


  1. Bill Posters
    14 Mar 12
    8:46 am

  2. Even assuming $12 m and no cannibalisation – both highly unrealistic assumptions – that’s not even going to start to close the gap on the $50 m a year loss the paper runs up.

  3. sarah edwardes
    14 Mar 12
    12:32 pm

  4. The trouble they all have is that the advertising is gouing faster than planned. They really have no paid model at all and it’s showing. You’d have to think that Chase Carey will sell all the News print business. Fairfax is already looking like a sick little mouse that’s being toyed with by its lousy chairman and a bunch of his sick mates – Palmer and Rinehart etc.

  5. John Grono
    14 Mar 12
    2:33 pm

  6. And as a media buyer, how much revenue the publisher earns (and how they earn it) is not my concern. What I am interested in is how many subs they sold by ‘channel’ – stand-alone print, stand-alone digital and packaged print & digital, as this provides valuable input into the likely number of readers (as opposed to copies) that could have been exposed to my ad and how and in what environment that I can use in conjunction with other audience metrics.

    So if they earn $12m good on them. If they earn $60k – which I think is unlikely as I don’t think you can subscribe to a one-off edition – good on them as well.

  7. Ted
    15 Mar 12
    2:53 pm

  8. John Grono makes the other interesting point which is about how many people actually are engaged with these products and are they buyers of things. Clearly the school kids who get bundles dumped on their verandah and the web browsers in Bangladesh are unlikely to add much to the sales effectiveness of a Westpac ad. Not to mention the large number of hotel copies that go straight to recycling.

  9. JG
    15 Mar 12
    3:22 pm

  10. Just to clarify Ted.

    In the ABC audit rules, “School Copies” – which MUST be under an auditable arrangement with a representative of the school, and must account for returns (i.e. can’t be dumped) – while they contribute to the circulation total are reported separately. Regarding “Hotel and Accomodation Copies”, these are done on a day-to-day basis and ordered based on room occupancy by each hotel. There are rarely returns on these copies as hotels in the main ‘under-order’, but if there are returns they are accounted for in the audit. Again, these copies are reported separately.

    While I think you may be a tad astray regarding school, university, airport and hotel copies (yes there are lots of copies out there – often read by multiple people I might add – the ‘dumping/re-cycling’ you refer to is accounted for by the audited returns process, and a “no return” is a red flag to the auditor meaning that while they exist they aren’t counted) the key thing is that if a buyer or a client attributes little or no value to a ‘channel’ of circulation (such as schools or universities) then that volume can be removed. Can’t say fairer than that!

    With the online traffic and audit measurement, traffic from overseas (as well as bots, spiders, crawlers etc.) is removed, so the Bangladeshi web browser is not reported either.