Thursday 21st April 2011
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TransTasman media giant Fairfax says it has not yet decided the best strategy around the potential use of "paywalls" on its digital news websites.
In New Zealand, the company is the biggest newspaper publisher and runs the stuff website, hosting news from its string of daily newspapers.
Fairfax chief executive Greg Hywood told Australia's Business Spectator finance news website he planned to invest in quality journalism to make up for the loss of classifieds markets, and warned that paywalls - requiring readers to pay for online content - could do more harm than good.
The company was yet to determine the best way forward with paywalls, and considered digital advertising would be the key to revenue growth in coming years.
Hywood hinted paywalls could be introduced for premium content, but the bulk of revenue would still come from advertising, the Business Spectator reported.
"My point around paywalls is that you want a paywall that doesn't impinge upon your ability to grow this market," Hywood said.
"You don't want to put a high paywall around something and shrink your market to nothing. It's better to leverage a large market into your digital transactions business."
The industry's dynamics had altered over recent years, with the relationship between journalism and classifieds changing significantly.
"The journalism was an important part of the experience, but the classifieds created a market in their own right," he said.
"It was the Saturday papers that made all the money, not necessarily for the journalism," he said.
"Now, the journalism is way more important because what the journalism does is create a market online.
"What we're doing with that online market, is translate that into a digital transactions business - which is there and growing, but has the potential to grow more".
This year, Fairfax disclosed that its Sydney-based Australian Financial Review (AFR) newspaper - where almost all of its online content was behind a paywall - had 6711 paid subscribers.
Circulation figures for the hard-copy newspaper have been relatively weak, with the Monday to Friday editions selling an average of 77,470 copies in the three months to December 31, 2010, down 3.5% from the prior corresponding period.
Fairfax would not give up its space in online employment advertising, despite the growth of rival jobs site Seek and other businesses, Hywood told the Business Spectator.
Fairfax had "reasonable brands with first mover market positions", particularly in real estate and car advertising, and would look to exploit its internal expertise to stay in the online market.
"It's early days," he said. "Everyone's making assumptions of permanence around these markets, these net-based markets, and I just think that we're probably in the T-Model Ford stages of the development of the internet."
Hywood - a former publisher of the AFR - earlier this year was appointed chief executive, the company's third since New Zealander David Kirk was appointed in 2005.
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