News Corp marketer admits future revenues must broaden beyond subscriptions and ads

L:R Damian Eales, Jason Kisgaard, Nick Ross, Jane Waterhouse

L:R Damian Eales, Jason Kisgaard, Nick Ross, Jane Waterhouse

The marketing boss of News Corp Australia has said that in the future newspapers would need move beyond just ad sales and subscription revenues and look to better monetise their existing audiences.

Speaking last Thursday at the Publish conference in Sydney Damian Eales, chief marketing officers for News Corp’s Australian operations, told a panel on paywalls that national broadsheet The Australian had now reached a situation where its advertising and subscription revenues were now equal.

Eales also argued this was a model for other newspapers as the newspaper sector looks to diversify revenue streams.

“We continue to grow yield,” said Eales. “The Australian has really led the way here… that business is now generating 50 per cent of its revenue from consumer revenues and 50 per cent from ad sales, which is really the direction all these publications need to be heading.”

“What will that revenue model become? I don’t think we know but in five years time we probably won’t be talking about 50 per cent ad sales and 50 per cent subscription revenues in the traditional sense we will probably be talking one third, one third and one third which we don’t yet have.”

His comments echoed those of Fairfax Media CEO Greg Hywood, who told the conference that morning he considered the company a “subscriptions business” and flagged its revenues had also become even in terms of subscription and ad money.

The CMO for News Corp argued that the publishing sector needs to review its traditional revenue model and look to better monetise its audiences.

“As an industry we are not very mature in customer relationship marketing,” he said. “It’s only a relatively new consideration – things like subscriptions, now we have to talk more about things like memberships because we want a broader relationship with customers.

“It’s all about acquisition, retention and those sorts of statistics. In the years to come we will be talking about the product per costumer, we will talk about average revenue per user, we will talk about overall advocacy, overall engagement etc.

“All that will be important because we will be using the base of customers that we have generated out of a subscription or a membership model. Whereby we can cross sell them a whole bunch of other content related services.”

Eales argued News Corp was well positioned in this environment with a broad set of products to provide its audiences.

“In the case of News that positions us really well because we have such a diverse product portfolio to cross sell them. Better still because we know what content they are consuming, what they are interested in we have a great opportunity to broaden that relationship.

“You can take that one step further and ask yourself what are the things we don’t sell that we should be selling to monetise these customer bases?”

The senior executive also spoke about News Corp’s ongoing refusal to release digital subscription figures for mastheads such as the Daily Telegraph, Courier Mail and Adelaide Advertiser saying that they would be released “in due course”.

“What we have release is that we have grown our digital subscription base to some 200,000,” he said. “We haven’t broken that down yet but we will in due course.”

“From a standing start we are selling a significant number of digital subscriptions in the Brisbane market with the Courier Mail, Adelaide with The Advertiser and in Sydney with the Telegraph. We are growing well and exceeding what our targets are.”

The most recent Audit Bureau of Circulation quarter on quarter figures for The Herald Sun showed the Melbourne tabloid grew only 123 digital subscriptions last quarter while other digital titles at News and Fairfax also slowed their growth.

Fellow panel members also spoke about the challenges of getting consumers to pay for news and commentary.

The Hoopla’s Jane Waterhouse told the audience how, when they put a ‘hard’ paywall up, it dramatically impacted their traffic, forcing them to move to a ‘soft’ metered model.

“We knew we had to create something that would one day click over,” said Waterhouse, publisher of The Hoopla. “We had to make that jump over into a paywall, we knew advertising would only sustain us for so long.

“What we found when we put up the paywall is that it didn’t deter advertisers. What is great is that our traffic has now lifted – it dropped 20 per cent when we put the hard paywall up but with the soft paywall we have increased 60 per cent.”

Jason Kisgaard, acting CEO of Private Media, which publishes Crikey, Smart Company and The Mandarin told the audience: “The consumer gets it now. Paying for content is not the anathema it was a couple of years ago.

“The path has been blazed for us its about how you provide that value and that reason for charging people for content in a crowded marketplace. It has to be able value if I’m going to part with my hard earned cash. ”

While Nick Ross, who is set to launch his own micro-payment platform called Nanotractions to allow publishers to charge a nominal fee to access an article, argued there were still real barriers to getting consumers to pay.

“I think one of the big barriers to paying for content is that there is no mechanism that allows you to pay for content across all media,” said Ross. “We need to make it easy.”

Nic Christensen 


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.