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News Corp gives away free tablets to grow digital numbers claiming strategy is ‘profitable’

Eales

Eales

Australia’s largest newspaper publisher has launched a major marketing push across its tabloid newspapers giving away a Samsung tablet, in an effort to bolster digital subscriptions.

News Corp marketing boss Damian Eales, who was earlier this week was promoted to head the publisher’s sales function on a “temporary ” basis, said that despite the upfront costs of giving away the tablet devices the promotion was profitable because consumers were being asked to pay for a 12 month subscription upfront.

“All of these subscriptions are significantly profit positive over the lifetime of the relationship,” Eales told Mumbrella. “Because the customer is buying an upfront 12 month subscription there is no churn in the first 12 months. That enables you to give customers greater value and we earn a greater return for our shareholders. It is profit positive from day one.”

News Corp TabletThe promotion is running across metropolitan newspapers The Daily Telegraph, Herald Sun, Adelaide Advertiser and Courier Mail and sees News Corp offer a bundle of content that includes access to their online properties, Fox Sports, streaming service Presto, and also the Samsung tablet which has a recommended retail price of $179.

It also includes a rewards program where consumers can get a free Harper Collins ebook each month plus a free 12 month NewsLifeMedia magazine each month, with the company putting the total value of package as high as $670 for the $249 12-month subscription.

Eales said they launched the subscription offer following a trial on national broadsheet The Australian last year.

“We ran a trial for this, with The Australian before Christmas, and we saw that it really appealed to a segment of customers that responded to our existing offer,” said Eales.

“It has brought a new group of customers to the mastheads. We just see it as a great opportunity to get more tablets in the hands of our customers – and in particular to get more of the digital editions into people’s hands.

“This is a mechanism that has been used across the world in similar businesses around the world. It has been very successful.”

Two page spread in The Daily Telegraph

Two page spread in The Daily Telegraph

Eales said the give away of tablet devices was important, but not the only way the company drove digital uptake, which on the Herald Sun, the only tabloid News Corp releases digital numbers on, appears to have stalled at around the 50,000 mark.

“It is a significant promotional aspect of our program. It’s not the primary reason that people subscribe with us, and it certainly won’t be the only way that we raise subscribers in the future, but it is an important part of the acquisition mix,” said Eales.

News Corp also declined to reveal how many tablets were being given away in the promotion saying only that it was “many thousands” and that it was useful for the publisher to be able to showcase its various offerings in magazines, books and video streaming.

“What we have seen with our subscriptions is people love content,” he said. “Our masthead core content is the most important component, being able to consume all the news, all the sport on any device any time.

“In addition to that, our rewards program allows members to download a Harper Collins eBook each month, NewsLifeMedia digital magazines that are part of the rewards program, we had Rdio as part of the program and now to have Presto as part of the rewards program- it just makes sense.”

News Corp Australia has consistently refused to reveal the digital subscription numbers for the Daily Telegraph, Courier-Mail and The Advertiser but Eales confirmed that News is approaching 250,000 across all its mastheads.

“We are not quite ready (to release individual masthead breakdowns),” said Eales. “But Julian (Clarke) has said we are around the quarter of a million mark paid subscriptions, we have got a very very positive trajectory and it will continue to grow.”

Eales also addressed industry questions about News Corp’s recent decision to move media agencies from UM to Mediacom.

The announcement came on the day it was confirmed Mediacom staff had deliberately faked campaign reports for three of its biggest clients for at least two years, and also breached the policy of its parent company GroupM by selling back to clients free or heavily discounted advertising time given to it by TV stations.

News Corp’s chief marketer refused to comment on whether GroupM had offered a “value bank”, a practice generally interpreted as using inventory given to them either for free or at a heavily discounted rate by media companies in return for putting a certain amount of business their way.

“We don’t go into into the detail of what Mediacom offered,” said Eales. “But suffice it to say we saw there were economic benefits of the synergies that GroupM can provide us with but they are across multiple businesses owned by News Corp.

“On balance when we added all of those benefits up, both synergy benefits and economic benefits, we felt it was a great deal for our shareholders.”

Nic Christensen 

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