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May 10, 2013

Newspapers circling the drain as paywalls falter

The latest Audit Bureau of Circulations results show massive drops in print circulation and reveal, finally, how many readers are paying for the Herald Sun online. Hint: it's not very many.

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It’s not only politicians who know how to “take out the trash”; media companies, too, have canny ways of minimising bad news about themselves. Just look at News Limited, which unveiled its new metered paywall strategy on Wednesday — two days before the release of the latest Audit Bureau of Circulations figures.

The ABC figures answer a question media watchers around the world have long asked: how many digital subscribers does Melbourne’s Herald Sun have? The answer: 26,436.

The Hun went behind a “freemium” paywall in March 2012 — a closely watched development given it was one of the first mass-market papers in the world to do so. News Ltd had good reasons for choosing The Hun: it’s the country’s biggest-selling weekday paper and has unique content — such as the SuperCoach fantasy football competition.

But the months went by, News stayed schtum about its results, and a consensus emerged the experiment had been a flop. And so it was. For a paper that still sells over 400,000 copies a day, 26,000-odd paying online readers isn’t a cracking conversion rate. No wonder a metered model is on the way for News’ tabloids.

By contrast, The Australian online is going strong with 45,869 digital subscribers compared with around 120,000 print readers. At $12 a month, that equates to around $6.5 million a year in extra revenue. Under the current system, the Herald Sun paywall would bring in around $4 million extra a year. Nothing to sneer at, but not nearly enough to make up for the massive declines in revenues from print advertising and circulation.

The latest numbers don’t paint a pretty picture for print: total newspaper sales during the March quarter fell by 9.2% compared to the same period last year.

Fairfax Media‘s slimmed-down metro papers continue to shed readers. The Sydney Morning Herald‘s Monday to Friday circulation slumped by 18.2% year-on-year to 148,037; The Age dropped by 12.6% to 144,277. The Sun-Herald again recorded the biggest fall: it plummeted by 24.4% and is now outsold almost 2:1 by its News Ltd rival The Sunday Telegraph. The Sunday Age declined by 13.6%. Broadsheet holdout The Canberra Times fell by 7.8% on weekdays to 27,132, and the weekends were uglier.

The only major newspaper to lift its circulation was The Australian Financial Review‘s weekend edition, which increased — yes, increased — by 18.2%. A snazzy redesign helped but, as The AFR admits today, two “bumper” editions during the audit period gave the paper a boost. Bumpers allow papers to effectively double-count — sometimes even more — their copies sold. The Monday-Friday Fin now sells only 64,861 copies, down 8%.

Over at News Limited, there’s little to boast about when it comes to the dead tree editions. The Australian fell by 6.6% and the weekend Oz slipped by 8.9%. News Ltd says it is stripping back marginal sales — the heavily discounted copies you see at hotels, airports and universities — and that’s true. The Oz‘s circulation, however, remains inflated by such deals: 19% of the paper’s sales are in the accommodation, airline, education or bundled categories. That’s compared to 5% at The Age or 11% at The AFR.

The Herald Sun in Melbourne fell by 9.4% on weekdays and the Sunday Hun declined by 7.7%. The Daily Telegraph had a similar drop, down 9.3% to 305,132 sales Monday-Friday. Mammoth seller The Sunday Telegraph lost some sheen, falling 8.2%. Brisbane’s Courier-Mail now sells 172,801 copies a day, down 8% on the same period last year. The Advertiser in Adelaide was down 9% and the Hobart Mercury slipped by 8.4% to 29, 227.

Kerry Stokes’ Seven West Media recorded a 2% drop for The West Australian, down to 176,189, and a 3.9% fall on the weekend.

For magazines it was one of the worst quarters on record, with sales for weeklies down 8.45% year-on-year when you take out the shuttered titles. Bauer lad’s rag Zoo Weekly, surely, is headed for extinction after recording a sales slump of 23.8%. Of the other Bauer titles, Take 5 fell by 10.8%, OK! by 13.6%, NW by 6.5% and Woman’s Day by 4.6%. Pacific Magazines’ That’s Life dropped by 12.6%, New Idea by 2.9% and Who by 8%.

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