Netflix and Spotify helping to alter consumer mindset of paid content, says News Corp

vic2News Corp has insisted consumers are becoming increasingly comfortable paying for content as it claimed the more stories it has locked behind its paywall, the more subscriptions it has generated.

Victoria Turner, general manager of customer relationships, marketing and insights, told the International News Media Association (INMA) world congress in London, that the company had seen strong growth in both its digital and bundled subscription packages.

It has, she said, helped stem the annual circulation decline of its national and metro newspapers from 10% to 5%.

Turner opened her presentation on paywalls at the INMA gathering in Kings Cross by rejecting the belief that consumers are inherently reluctant to buy content.

“I don’t believe that people won’t pay. They will pay for the value they use,” she said, before explaining to delegates how News Corp switched from a metered pay wall to a freemium model in mid-2015.

“People are willing to pay. We are seeing it becoming more common, with the likes of Netflix and Spotify.

“Our experience is that more people are paying more, for more content.”

Turner said News Corp’s digital subscriptions have “more than doubled in the last few years”, despite increasing its subscription pricing.

“This growth isn’t abating and our digital subscription revenue has also doubled in the last two years,” she said.

Income from digital subscriptions now accounts for half of the company’s total digital revenue, which itself has experienced double digit growth, Turner revealed.

In the latest audit figures released earlier this month, digital subscriptions for the Herald Sun in the January to March quarter climbed 29%, year-on-year, to 68,823 while The Australian saw growth of 14.3% to 77,371.

The head of News Corp’s digital and print subscriptions said the development of premium content has been a “significant change” for its editorial teams and, along with a focus on a “membership value” proposition, has been instrumental in driving subscriptions.

“What we have seen over the last 12 months is the more stories that are locked the more subscriptions are driven,” Turner said.

“We have seen the number of stories locked go from 25% to almost 50%, with minimal impact on traffic and page views.

“We have seen some of our mastheads grow traffic and audience while tightening the paywall.”

Tobias Henning, general manager – premium, at German title Bild, also suggested the freemium model was the way forward, arguing that its editorial team “know how to sell content”.

“We still think freemium is the right model for us. Our editorial team know how to sell content. If you have a really good headline then the newspaper sells better than with a bad headline. It’s in the DNA of our editorial team to sell content.”

Henning also told the congress that customers understand they need to buy premium content.

“If we make something premium and the customer gets a feeling that it is something special then they should pay for it,” he said.

“In a metered model with 20 free articles, for example, the 21st could be a random article which is not attractive and does not convince the user to pay. I don’t think that is going to work.”


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