Strategy and Accounting News Corp is amongst the top three media conglomerates in the world that has major interests beyond newspapers including films, cable, and satellites. The company has achieved greater success as reported by News Corp for the year 2006 with the increase in revenue and net income. However, the newspapers segment has reported negative growth during the period while the circulations of magazines have increased compared to the year 2005 (News Corp, 2006)1. Overall the revenue of News Corp was increasing but profits in the newspaper segment were decreasing since 2006 and the introduction of the paywall strategy in 2010 did not provide the rebound expected.
This paper critically reviews the effect of the paywall strategy on News Corp and recommends some viable suggestions. Paywall Strategy 1) The newspaper industry earns the majority of its revenue through advertising from other companies who pay depending upon the number of circulations. The advent of the internet gave rise to electronic news where advertisers pay depending on the page views. The paywall strategy implemented by News Corp by putting WSJ, The Times and The Sunday Times behind the strategy has resulted in a downfall in the number of monthly page views.
However, it is pertinent to mention here that availability of free content online and decline in the circulation of newspaper prompted the management to put online content behind a paywall so that it may increase the newspaper circulation and at the same time generate revenue from subscriptions (Salmon, 2010). The objective of the paywall strategy is to identify the customer and their wants and interests more clearly and build direct customer wherever possible.
It further makes it clear that advertising alone will not bear the operational costs of print news as a successful newspaper of the future will charge for their content (News Corp, Annual Report, 2009). The strategy worked for Wall Street Journal as it provided editorial content, analysis and expert articles on topics which attracted certain target groups for subscription (Drury, 2010)2.
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