Fairfax’s Greg Hywood: paywalls work for ‘very special content’
Just under a fortnight after New Ltd’s Richard Freudenstein announced the introduction of paywalls around The Australian’s content, Fairfax chief executive Greg Hywood has said that paywalls are necessary, but only for “very special material”.
In an interview with ABC 1’s Inside Business program, Hywood is reported to have said: “We’ve said that our new app will be a paid product. We will have payment perhaps behind some paywalls for very special material.”
“But we want to make sure that people have access to our brands. Because if your business is creating audiences, you don’t reduce your audience by taking too much money upfront,” he said.
Hywood suggested that the paywall of Fairfax’s The Australian Financial Review was too high, and hinted at a plan to lower it. “We believe that there’s an opportunity to broaden the access into the AFR material for a broader audience, so we’re having a look at that.”
I wonder how much advertisiers will be prepared to pay for that “broader audience” that Hywood seeks for the AFR? Sure, if you’re going to charage a premium to access the very high quality content that the AFR offers then you probably need to open a few windows to give people a view into the house that you’re trying to sell them, however, this is very different to going after a “broader audience”. Whilst targeting a broader audience may increase traffic / circulation, will advertisers still pay a premium for an audience that they can access more cheaply elsewhere? Why pay $50 CPM at the Fin when I can pay Adconion $1 for the same audience. Becareful what you wish for My Hywood – chase the audience to support the ad revenue and you may end up losing both. Just ask the former staff at the Seattle Post-Intelligencier.
There might be a nuance there, but it sounds like total confusion. The TradeMe proposition is astonishing: we might sell it because there are other things to buy. WHAAATTT?
We’re going to cut our quality control to increase our quality and sell off our profitable assets to increase our profits.
Share price: $1.35 —–> $0.94
PayWall will means people turn to other media
Ann, what is your recommendation for these businesses then? As a previous employee of Fairfax, as well as other major digital organisations that are considering paywalls, it is becoming more and more irritating to me that people constantly knock paywalls but have no other solution to offer.
Of course, everyone understands that you cannot charge for generic content eg news, but there is other specialist content that would be earmarked for payment.
What would you do if you were in their shoes?
Increase cover price (no)
Increase advertising rates massively (no, of course you wouldn’t pay more, or you want it all on a pay for performance basis)
Cut staff headcount massively (no, you reduce productivity and get slammed for this)
Charge for your unique content (maybe)
I have no issue with people voicing their opinion but do it constructively and with some other suggestions in mind, don’t just slam these businesses for trying to find a way out of the dinosaur ages and into the future where they can prosper.
Everyone loves to bash Fairfax, but they finally have someone in charge who is not burying his head in the sand and is trying to save a company that otherwise may not be around in 20 years if the status quo is maintained.