The AFR paywall numbers – not as bad as you’d think, but not as impressive as they claim
I must confess, I felt somewhat cynical when Fairfax Media sent out a press release yesterday offering for the first time clues about how the AFR’s long established pay wall is faring.
Cynical because the timing seemed designed to draw attention away from yet another decline in its print circulation.
And also because the number seemed so darned low.
But I am, I confess, beginning to come around slightly.
The bad news is that 6711 subscribers in a country with a population of nearly 23m is not great, even if (and I stress the word if) they are paying $1140 a year each. That would amount to around $7.6m a year.
By comparison, the somewhat less generously resourced Crikey currently boasts 17,352 subscribers. Based on its “vanilla” sub rate of $145 a year, that would be subs revenue of $2.5m although I suspect the actual number would be a bit lower.
And of course, that’s not an entirely realistic comparison, as the AFR has not only much bigger costs, but print revenues too, which Crikey does not. Based on its latest circulation numbers, the AFR’s cover revenue would be around $67m a year at best. That’s not taking into account printing and distribution costs, and before we even begin to talk about the cost of the journalism.
But given that print circulation is still nine or ten times the AFR’s digital revenue, the paywall starts to look like a failure. Particularly since the small online traffic means that digital advertising revenue would be negligible, and it’s taken ten years or so to get to this point.
But there is a bright spot – that’s the 53% year-on-year increase in digital subscribers the company claims. One way of looking at it is that although it lost 2737 weekday print sales in the latest audit round, it put on 2300 or so digital subscribers. If that trend continues, there would be a point where the digital subscribers overtook the print subscribers, and the AFR still has a business model.
Which would be impressive, considering what an annoying user expierence the AFR’s site currently is. But imagine what the take up would be like if the site became a pleasure to use.
The positive outlook relies on a couple of big assumptions. First that the claimed 53% increase is true. And second that growth continues at this rate.
(10.15am update: Fairfax insists that the 53% figure is accurate and reflects the number that is reported to the board; and that the growth rate is continuing.)
If so, the AFR’s digital audience would grow to the point where it would actually be big enough to interest advertisers. And that same virtuous circle that mass market newspapers used to enjoy would begin again.
For now though, the AFR’s number does not prove one side of the paywall debate or the other.
It’s too big to write off as a total failure, and too small to have anyone celebrating the salvation of journalism
Tim Burrowes
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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More to it than meets your eye Tim.
http://www.abc.net.au/unleashed/43864.html
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Tim,
Your figures here don’t take into account advertising revenue which is kind of important. Yes, the AFR has published editions with no ads, but their would be a reasonable advertising (print) stream.
The really interesting opportunity that the AFR’s arrogance/incompetence has created is a dearth of really good finance websites. Seriously. Australia’s biggest website in the finance category is ninemsn money!
Finance advertisers are higher yielding online advertiser, and an open, engaged AFR.com would definitely bring in more than $6M a year in advertising. A lot more.
But this is all rooted in the politics of working at Fairfax. When I worked there there were huge internal turf wars over who was responsible for what with the AFR website. It was all politics. And to be fair to Michael, he won that battle, with (as I recall) the AFR one of the only websites outside of the seperatley run F2 business.
Now. Ten years on, the more things say the same.
And I will also humbly suggest to you Tim, that if you asked Fairfax to release their number of full freight paying AFR.com subscribers over the last 10 years you will see that it has pretty much always been about 5,000. A project called AFR desktop a few years ago – where they tried to turn the AFR website into a bloomberg type product (I kid you not) would have moved the needle a little bit on those figures.
Otherwise it’s steady as she goes with around 5,000 online subscribers for 10 years and sagging circulation with plummeting print ad sales.
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“print circulation is arill”
Shouldn’t that say ‘still’, Tim?
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Would be interesting to know how frequently the 6000 or so users are using the AFR website. Revenues are great but longer term it really depends on usage.
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Well spotted Spelling Corrector. Fair to say that my already poor use of spellcheck declines even more after midnight. It’s a Gremlins thing…
Cheers,
Tim – Mumbrella
not an alcohol thing?
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Tim, I have it on good authority that News Limited is also about to introduce a pay wall for The Australian online edition. Should be an interesting one to watch…
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Its overpriced for what you get
Halve the cost and might see some upside.
its only companies with fat wallets paying these subs.
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>@snoop “Its overpriced for what you get”
Certainly compared to FT.com it is. FT has subscriptions a fraction of the price of the AFR.
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AFR has created a true corporate only website. 6,711 subscribers is hardly a base Fairfax can be proud of after ten years. As a small business, we will not renew our print subscription. We now gain most of our business news from sources like Crikey, Business Spectator, the Australian and even SMH Business section, which has really improved. Plus WSJ, FT and Economist. You can subscribe to most of these with so much better value. As for the AFR technology, it is simply awful. I wonder why they bother continuing as the 6,711 inevitably shrinks to 3,000 and at that stage all they have is the limited financial district as their customers. Why don’t these guys listen? The signals hav been there for years. They will go the same way as the SMH iPad app. Down.
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Of that 6, 711 subscriptions, I’m guessing roughly 6, 710 are paid for by the subscriber’s employer in the finance business. I’m no expert at all, but wouldn’t a free site, open to search engines, linkable and covered in personalised advertising make infinitely more money?
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