It doesn’t matter who you read or whether or not you pay for it — the high-brow legacy publishers eking out a future don’t want you to engage in a simple commercial exchange: money for journalism. Instead, they want a relationship with you. They want you to consider your subscription an indication of, and first step towards, your broader cultural consumption. They’ll sort out the deals and the events, and you pay up on a recurring basis. It’s a response to the commodification of news — if news is free and plentiful, upmarket publishers would rather sell you something else entirely.

If you subscribe to The Age or The Sydney Morning Herald, you’re about to get a free six-month digital subscription to The New York Times as well. The offer was announced by Fairfax this week and described by Fairfax’s director of consumer marketing Vicki Aristidopoulos as a reward to loyal customers. “This collaboration, with an esteemed publication like The New York Times, perfectly illustrates the type of exclusive rewards on offer. You will see more and more of this in the year ahead,” she said. Indeed, keen observers will have seen it already. Earlier this month, Fairfax also announced a partnership with Universal Music that will allow new subscribers to gain access to a new album every week for six months. This might not seem like much in the age of Spotify, but it’s another reward (or inducement) to subscribe.

News Corp is doing the same. The company’s paywalls are higher (or at least, harder to get around) than Fairfax’s, and so the relationship between subscribing and reading its journalism is more direct. But News is also looking at a membership model. As News Corp group marketing executive Damian Eales told AdNews earlier this year:

“As an organisation we’re very much moving from a transactional relationship with customers where we’re selling an individual newspaper [to a customer] to a membership type relationship where we’re providing that customer with content not just via our newspaper but also through the consumption of content be it online, tablet or mobile.”

To this end, News Corp is giving away subscriptions to its magazine titles along with its newspaper subscriptions, for example.

And then there are the events. Both News Corp and Fairfax are placing increasing priorities on their nascent events businesses, along with dozens of similar publishers around the world. For Fairfax, the events business earned less than $10 million in 2012-13, according to the latest annual results (it wasn’t separated out but part of the broader “corporate” division, which earned $10 million in total). But it’s a work in progress. In this, legacy publishers are following in the footsteps of niche publishers, particularly those of a business-to-business nature, for whom selling tickets to industry conferences often constitutes the majority of their yearly revenues.

Product bundling is a tried-and-tested strategy. University of Melbourne marketing professor Mark Ritson, who moonlights as a consultant to luxury brands, describes Fairfax’s recent value-adds as “pretty smart”. “It’s all about incentivising consumers to get them over the line,” he told Crikey. The traditional approach to driving up sales in Australia is to offer price-based discounts. But these erode profitability and work to reduce the value of a brand in people’s minds. Product bundling is less expensive in this sense. While companies will often pay something for the ability to give away someone else’s product along with their own, this isn’t typically as expensive as offering a discount, and will have little to no effect on a product’s brand value. “It’s win-win,” Ritson said.

It’s not just Australian publishers moving beyond the simple money-for-journalism equation. The Guardian has long vowed it won’t put up a paywall, and the interest earned from its assets in the Scott Trust means it can get away with breaking even every year. But its membership model, launched in September, provides another way to make a bit of cash. So far it’s mainly of use to British readers, who can pay between 15-60 pounds a month to get discounted tickets to live events, along with newsroom tours and other insights into the editorial process. It’s no paywall, but it asks readers to voluntarily cough up to support the paper they read online (they’re already paying if they read in print).

The Guardian’s audience is huge — 105 million global browsers a month. As Nieman Lab has estimated:

“If The Guardian could move 1 percent of those 105 million unique visitors to even free registration, that’s one million known customers. Three percent gets you 3 million known customers. Registration, smartly, becomes an on-ramp for pay. Pay for news products. Pay for commercial products. Pay for things we can’t envision today. Then, of course, there’s the direct revenue.”

Through it’s membership model, The Guardian aims to build a relationship with its customers that will make them easy to monetise, now and into the future. It’s not directly selling the journalism, but it is selling a way to self-identify with and support it. With some goodies thrown in for good measure — a strategy we at Crikey have employed for years.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey