Wednesday, January 13, 2010

News rings management changes as it plans for paywall

News Ltd announced a series of important management changes today affecting their Australian news operation. The most important change was the appointment of News Digital Media chief executive Richard Freudenstein as chief executive of The Australian. Freudenstein keeps his old job and the move was widely seen as a key predecessor to the introduction of online paid-for content which Rupert Murdoch announced for 2010.

The 43 year old Richard Freudenstein joined News Digital Media when it was created 2006. Prior to this he was a key member of the team that launched Foxtel Pay TV in Australia in 1995 and then spent seven years at British Sky Broadcasting. There he was a leading negotiator in Sky's 2004 $2 billion deal for Premiership football. He is also chairman of Ltd and a director of The Bell Shakespeare Company.

The move also sees The Australian being moved to a new stand alone division within News Corporation Ltd as part of an "aggressive and ambitious growth strategy" for the national broadsheet. Freudenstein will report directly to News Ltd chairman and chief executive, John Hartigan in this role. Up to now, The Australian has been part of Nationwide News, publishers of Sydney's The Daily Telegraph and Sunday Telegraph. "This announcement reflects the significant expansion of our ambitions for The Australian," said Hartigan in a statement. "By creating a separate division and deploying more resources, we aim to enter an unprecedented era of growth."

The establishment of a separate division should give The Australian more flexibility when it comes to negotiating its printing and distribution arrangements with News Limited's other state divisions. But this move is not really about sales of the broadsheet. Hartigan hinted as much when he said News Ltd also wanted to expand The Australian's presence online, on mobile phones and on "new platforms". Nick Leeder will follow Freudenstein from NDM into The Australian as deputy chief executive, but unlike his boss he leaves behind his current post as NDM chief operating officer. Chris Mitchell will continue as editor-in-chief of the newspaper, a role he has held since he joined the paper from the Courier-Mail in 2002.

However the news comes on the same day as the result of a survey shown at The Content Makers that showed 70 percent of Australians would not be prepared to pay for Internet content. The survey by the Australian Research Council Centre of Excellence for Creative Industries & Innovation at Swinburne University’s Institute for Social Research is part of the World Internet Project which is the leading international source of research on how people use the internet.

Eight hundred Australian internet users responded to the question “A daily newspaper costs around $1.50. How much would you be prepared to pay to read an online newspaper?” Another surprising result showed that “news junkies” are those least likely to be willing to pay for it. Perhaps not as surprising is that urban dwellers with limit access to quality papers (ie the ones with “Murdoch only” press) were more prepared to pay for content than those living in Sydney, Melbourne or Canberra. Nevertheless, the findings are challenging for the Murdoch empire and lend credence to crankynick’s observation in Larvatus Prodeo that the paywall may well be aimed more at corporate organisations than individuals. Time will soon tell.

No comments: