Comments on: Could News Ltd take its newspapers free?

By: bernard

bernard — Fri, 17 Apr 2009 01:53:44 +0000

Also News Corp is not particularly good in picking up advertising. Fairfax does much better with advertising. So I would expect that Fairfax would be more likely to adopt the free model as circulation is a problem to them now and their advertising revenue is much more important to them

So I think we are hearing long-term thinking aloud in News Corp rather than a plan. Why would News Corp give newspapers away if they now so many paying for it? If they wanted to follow this model, they could expand their existing free paper.

When they started these free papers, I am sure News Corp looked at forcing newsagents to deliver free newspapers. Because contractors were used suggests that they could not make it work.

I am sure that some newsagents could be forced into delivering these free papers for nothing; many would retaliate by doing the job badly intentionally so this agreement would have to be policed. That costs money, if lawyers are involved big money.

Then of course many newsagents would refuse. For those that refused, News Corp would then have a difficult choice of dropping profitable agents or getting someone else to deliver the free papers.

By: Danny

Danny — Fri, 17 Apr 2009 00:23:00 +0000

At the end of they day it is all about circulation numbers. But the Publishers have to ask themselves who are there current customers and why do they choose to purchase either the Age or the Herald Sun or the local paper. The prices are different, so is it the price or the “content “. At our small country town, we currently have 2 local free papers each week, but still manage to sell 12 times more local and city papers, that we charge for, so it must be the “content”. And if we were to charge 5cents for the free paper, I am sure distribution would drop. A subagent/ Service station does not rely on newspaper sales to boost his petrol sales, so if he was not getting income from the sale of the Newspaper, I am sure he would not waste his time having them, which would lead to less distribution. If the Newsagent distributes papers to his 10 subagents, and delivers to his 300 plus customers, is not going to get paid appropriately, then will he give the same effort he currently gives. The home delivery customer may only visit his shop once a week to pay his account, no deliveries, and the customer comes to his shop 7 days a week to collect his free paper, more opportunity to sell him something else in his shop. Which is the best situation? The free paper, will in doubt cut the cost of distribution, cut back circulation, cut back jobs, and there is no point advertising to people who have no money to spend because they have no job. This is all “ just another persons opinion “ but the person who makes the decision on free papers, will not be able to turn back the clock, will still have his top level income, and just say “ well that didn’t work, oops “

By: mumbrella

mumbrella — Thu, 16 Apr 2009 22:35:12 +0000

Hi Bangers,

I guess in any contract negotiation one side can ask whatever they like, and the other can choose whether to accept it or not.

And in this case, as far as I know it’s News Ltd rather than Fairfax that may be thinking about this.

Cheers,

Tim – Mumbrella

By: Bangers

Bangers — Thu, 16 Apr 2009 22:10:25 +0000

Please excuse my ignorance, but could it be possible that considering that most (if not all) contracts with newspaper publishers are shortly due for renewal, could Fairfax (for example) stipulate in the new contract that in order to keep our supply of “The Australian” et al. that is compulsory to keep ” The Free Daily” and the associated record-keeping of daily/weekly/monthy distribution/collection of said paper?

If that is the case, all newsagents & distributors of “The Free Daily” would either have to forcibly submit to the new terms & conditions in order to keep their existing supply of Fairfax publications or drop Fairfax altogether……..Is this a possible scenario? And if so…….where do I insert the sharp end?!

By: Heather Craven - Audit Bureau

Heather Craven - Audit Bureau — Thu, 16 Apr 2009 05:59:50 +0000

The CAB audits the entire distribution of a publication and reports how the publication reached the recipient. CAB’s recent rule changes increase the transparency of the audit process with further analysis of bulk distribution and encouraging publications with high volumes of mailed copies to report requested recipients.

A daily newspaper could report requested copies if it maintained high subscription volumes which would remove the need to track proof of requests on a daily basis. Either way the CAB audit will offer total transparency of the distribution process.

By: Lucas Ng

Lucas Ng — Thu, 16 Apr 2009 04:40:34 +0000

Thought provoking as always Tim.

A free edition or a halfway house is certainly one direction News or Fairfax could go, especially when you consider what Alan Murray, deputy managing editor of the WSJ (and executive editor of WSJ Online) has said about building reach:

“Don’t charge for the most popular content on your site. That’s the been the mistake that some people have made in the past. Items with broad appeal are better used to build traffic that can be turned into advertising revenue.”

(From an insightful interview over at the Nieman Lab: http://www.niemanlab.org/2009/.....of-wsjcom/)

What better way to build reach than making your most popular newspapers free. Charge a subset of your subscribers at higher prices. Charge advertisers higher rates for more ads appearing to more readers.

One other direction that newspapers are looking at (particularly NYT and The Guardian) is charging for platform access, eg. Data APIs. For example, the NYT recently released hyperlocal blogs with the intention to license redistribution of the hyperlocal platform instead of charging readers or even advertisers.

By: Chuck

Chuck — Thu, 16 Apr 2009 04:16:48 +0000

Very interesting – but distribution would be the key, as already mentioned.
MX is only handed out in the major CBD areas, as its costs News for the labour. A flat fee?… would retailers pay for a loss leader to get customers in the door? Only if that boughgt them some sort of exclusivity. A bit too intangible for the average Joe or Apu I’d imagine. A license to sell? Might wortk for big ticket items like petrol but not for newsagents, as its often only the paper that drives consumers into the shops in the first place.

By: Digital gal

Digital gal — Wed, 15 Apr 2009 12:28:07 +0000

Interesting conspiracy theory. It has been done before: Microsoft gave away IE to kill of Netscape, is the example that springs to mind.

And, of course, Google specialises in the the economics of the giveaway, proving that you can make money out of giving stuff away for no charge.

But if you accept that, then everything Rupert and Robert Thomson recently said about how giving it away for free online was something that could not be sustained is also part of that conspiracy.

By: mumbrella

mumbrella — Wed, 15 Apr 2009 08:10:29 +0000

Hi Ben,

I reckon that’s the make-or-break question. Presumably the only possibility would be a dramatic renegotiation of terms with newsagents that was no longer based on a payment-per-newspaper model.

By: Ben

Ben — Wed, 15 Apr 2009 07:44:30 +0000

My question would be how would they retain the distribution they currently have? Newsagents/servo’s etc would have no reason to stock them … not sure they could have MX Style bins in public spaces across the nation without a massive potential litter issue.

By: mumbrella

mumbrella — Wed, 15 Apr 2009 07:29:40 +0000

Hi DADW,

Maybe somebody from the CAB / ABC could answer that technical point (Gordon – are you out there today?) but I suspect that the technical rules of an audit body would not be a major factor in News Ltd’s thinking. I presume that if it happened it would be similar to whatever the mechanism is for MX at present.

Cheers,

Tim – Mumbrella

By: Distribution a dirty word?

Distribution a dirty word? — Wed, 15 Apr 2009 07:08:45 +0000

This would instantly change the newspapers to a distribution (sorry, reach) model requiring the titles to be CAB audited rather than ABC. So, with the potential changes to the CAB requiring ‘proof of request’ for freely distributed titles, how will the major newspapers do this on a daily basis. Advertisers are demanding tranparency in regards to how many people, and who exactly, receive the publication. Selling on reach alone may give you a bigger number and may appear to help a sales team, but this could all be in vain if the ‘reach’ cannot be qualified under the proposed new rules. Magazines must play by these new rules – will the newspapers be expected to do the same?

By: far out brussels sprout

far out brussels sprout — Tue, 14 Apr 2009 11:35:19 +0000

This video from TED via Merge blog is an interesting aside. It looks at how radical re-design can positively influence circulation.

http://mergeblog1.wordpress.co.....ko-on-ted/

By: Lizza

Lizza — Tue, 14 Apr 2009 10:56:12 +0000

Wow, this is huge. I wonder if magazine publishers will start considering the same thing too.

By: A bit suspicious

A bit suspicious — Tue, 14 Apr 2009 09:16:10 +0000

This all seems very well informed. I wonder if a kite is being flown for News to see how the market reacts