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South China Morning Post returns to a subscription model after 4 years

In a nod to the ongoing Covid-19 pandemic, news and information critical to community health and safety will be free to access.

The South China Morning Post has announced it is reversing its decision to move away from a subscription model, having taken down its paywall after its acquisition by Alibaba in 2016.

From the start of August, the Hong Kong-based publisher will roll out a metered paywall for its website and app over coming months.

Readers worldwide will be able to access some articles for free before they are prompted with a message to subscribe for further unlimited access. They will also have access to SCMP’s virtual and in-person events.

In a nod to the ongoing Covid-19 pandemic, news and information critical to community health and safety will still be freely accessible.

In her letter to readers, SCMP’s editor-in-chief Tammy Tam acknowledged that “comprehensive reporting is costly and the century-old advertising model is no longer enough to sustain high-quality news”.

“SCMP’s commitment to journalism means that this model must evolve and our business must align with our greatest accountability: to serve our readers with uncompromising truth. So, we are asking for your support to help safeguard the journalism that the world deserves and the future of SCMP,” she wrote.

Why is SCMP doing this?

  • For Hong Kong and China-based publishers like SCMP, they must alo cope with the likes Baidu, Alibaba andTencent (collectively known as BAT), which occupy more than 60% of the total digital advertising market in China.
  • Alibaba is currently the largest digital ad seller in China, with its ad revenues accounting for more than 32% of the market in 2019. In addition, the rise of other niche companies such as ByteDance, which owns short-form video app Douyin (TikTok), as well as e-commerce giant JD.com, Meituan and Xiaomi, has drawn advertising revenues away from BAT and publishers.
  • The subscription model helped the publisher build a paid subscriber base of around 2.5 million four years ago, before the paywall was removed by Alibaba.
  • It claims international ad revenue is also on the rise, contributing significantly to its revenue – because it chose to move away from the paywall model, which allows publishers to collect data and understand audiences to improve their offerings and share it with advertisers who are keen to target audiences on their site through programmatic.
  • SCMP remains a loss-making investment for Alibaba and the publisher has been working towards creating a self-sustaining model through creative new business models, with the aim of building multiple streams of revenue.

What does this mean for advertisers?

  • The publisher expects a slight change in its top-line page view number but does not expect its total readership (Monthly Active Users) to be impacted.
  • All paid content from advertisers will remain accessible and will not count towards a user’s meter. The publisher claims there will be no effect on the distribution, discovery and performance of paid media.
  • SCMP believes loyal readers are highly-valued by advertisers, a prospect that marketers can look forward to because of brand engagement and audience targeting with tools like SCMP Lighthouse and SCMP Signal.

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