Media Buyers' Reaction: The Sun and The Telegraph to introduce paywalls

Tuesday saw both The Telegraph Media Group and News International announce that two of their leading newspapers would be held behind online paywalls in the near future. It was no great shock, but with online audience numbers likely to be impacted as a result of the introduction of the new commercial strategy, The Drum sought the reaction of a few in the media planning and buying sector's views as to what they felt would be the outcome for The Telegraph, The Sun and their advertisers.

Simon Bevan, managing partner – Investment for Vizeum

To be absolutely clear the two propositions, from The Telegraph & The Sun, are quite different. I believe The Telegraph’s proposition is really interesting, overtly commercial and mindful of advertisers who are looking to build a partnership with their brand. Whilst the pay wall is metered to 20 articles per month all sponsored content is not affected by the pay wall ensuring that advertisers gain maximum exposure for their investment.The Sun on the other hand has made a significant investment for the Premiership highlights, with the USP of readers being able to view them straight after the final whistle. This will resonate with the core football audience, and be interesting for certain advertising sectors such as bookmakers. Only time will tell whether a pay wall will be the answer to recouping the investment NI have put behind the content.Whilst audiences tend to be smaller, those who are willing to pay for great UK journalism are more engaged with the content – that said the online world provides many alternative sources for readers to quench their thirst news and sport content.

Liam Mullins, head of trading, the7stars

The Sun and Telegraph moving to a metered model on their websites is another example of newspaper brands attempting to work out how to monetise their digital content. News International was the first publisher to bring in this model in 2010 – and what it subsequently saw was a huge decline in audience figures. But the landscape has changed since then. Now, consumers expect to be able to access a brand across different touch points for one price. A Telegraph enthusiast for example, may read the paper, consume content on mobile or tablet or use it as a quick resource at their desk. From a consumer’s view then, it makes sense to have one subscription across all points, it’s just whether they are loyal enough to pay, or want to pay for it.The problem for both, is that loyalty online doesn’t exist; getting readers to pay for something they are used to getting for free is hard. What’s likely to happen is a move away from the huge print readership numbers of the past, towards a smaller coterie of superfans. Inevitably, both brands will lose some followers, and the dip in readership will equal a drop-off in ad revenue. As a business model however, it does mean that by ring fencing their sites, both publishers will “own” their customers’ data and be able to repackage and sell this to advertisers by creating their own DSP much in the same way Mailonline has. Having said that, I have my misgivings about whether this is the right move for these titles. There’s no question that by becoming omnichannel brands rather than just newspapers, they can understand, appeal and sell an audience, as a whole not just defend sliding circulations and dwindling readership. But the challenge will be to create compelling enough content to keep the UK public engaged with the newspaper brands, especially when they have to pay. The news will always be accessible somewhere else, be it via the BBC, Sky News. The result is that content will have to work harder than ever.

Gordon Eldrett, business development manager, MediaCom Edinburgh

It's an interesting decision and one that shows that nobody has successfully found a way of replacing their lost offline revenue digitally. For advertisers I think it will be less of an issue as the digital buying model is more and more moving away from buying specific sites in favour of buying audiences via an exchange model. As for publishers, this potentially reduces their print audience even further and therefore reduces their advertising revenue. Nobody has yet managed to make the subscription model pay to the extent that they need it to. Clearly some sort of solution is needed but I don't think this is it.

Zoe Bale, head of press, Carat

I’m not surprised the Telegraph has taken this approach as it has been testing it with its overseas market since October 2012. With the recent announcement of a ‘digital first’ strategy it has to make sure it is monetizing its digital content and producing good quality content requires money. Metered paywalls are growing in popularity and are proving to be successful with many publishers seeing good conversion rates. Just look at the FT who now has more digital subscribers than print subscribers. As the number of tablets and smartphones users increase so has the propensity of people buying content online. In terms of audience, expect to see a slight dip in total audience reach but it certainly won’t be prohibitive. Articles will still show up in searches and people will still be able to click through from twitter. Furthermore the mobile website, blogs and galleries will all sit outside the paywall. A major benefit for The Telegraph and advertisers will be the increase in consumer data, enabling a greater understanding of audiences and insight and thus presenting new opportunities for advertisers to engage with audiences.I think the move is a win for advertisers, a win for The Telegraph and a win for journalism. In terms of The Sun it is likely to see more of a hit in terms of audience as the female audience go elsewhere for disposable content. However it will have premium video content in the form of Premier Football goals and there will be an audience who will pay for this. If anyone knows how to monetise premium sport content then it would be Rupert Murdoch.

James Latham, business director, Wunderman

The web’s culture of ‘free’ has had an erosive effect on how people value online content, even quality provision by reputable media owners. To extricate themselves from the ‘free’ problem they helped to create, publishers switching to paywalls are having to innovate and add value with differentiated online content. In this sense, magazines such as Wired and Monocle have led, while News International and the Telegraph are followers. Done well, behind-the-paywall content can drive additional revenue from a quality readership, which advertisers value more highly than the ‘free’ mass – a double win. As more publishers make the switch, and the technology enabling digital micro-payments advances and is more widely adopted, paying for quality content will become the behavioural norm.

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Stephen Lepitak

Stephen Lepitak is editor of The Drum, with responsibility for overseeing the day-to-day running of the content produced for the various platforms run by the publication. Over the years he has interviewed agency network bosses such as Sir Martin Sorrell, Maurice Lévy and Arthur Sadoun, as well as Cindy Gallop, Kim Kardashian, film directors James Cameron, Spike Jonze, Richard Curtis and Lord David Puttnam. With a keen interest in media and breaking news, Lepitak has been with The Drum since 2005 and is based across its UK, US and Asia operations.

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