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.

Richard Freudenstein, 43, 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. He was a leading negotiator in Sky’s 2004 $2 billion deal for premiership football. He is also chairman of realestate.com.au Ltd and a director of The Bell Shakespeare Company.

The Australian is also moving to a new standalone 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. The Australian had 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. “By creating a separate division and deploying more resources, we aim to enter an unprecedented era of growth.”

The separate division should give The Australian more flexibility to negotiate printing and distribution arrangements with News Limited’s state divisions. But this move is not really about paper sales. 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, leaving 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.

The news comes on the day a survey at The Content Makers shows 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 “news junkies” are those least willing to pay for it. Not as surprising is that urban dwellers with limited access to quality papers (ie the cities with “Murdoch only” press) were more prepared to pay for content than those living in Sydney, Melbourne or Canberra. The findings are challenging for the Murdoch empire and lend credence to crankynick’s observation in Larvatus Prodeo the paywall may well be aimed more at corporate organisations than individuals. Time will soon tell.

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