Mail Online, the digital news platform branded as the “Daily Mail” outside the UK, is considering establishing a “freemium” paywall model for some of its content from early next year. The 20-year-old site has a 25mn monthly reach in the UK – where its host newspaper is the country’s second most profitable daily – and 400mn+ monthly visits globally. It has not only comprehensively beaten BuzzFeed (which launched three years after Mail Online in 2006) but has become highly profitable. It is believed to generate some £40mn of EBITDA for parent company DMGT which de-listed from the stockmarket almost two years ago.
The post-pandemic profit growth – during which Mail Online changed places with DMGT’s Metro free tabloid as a significant profit contributor – also accelerated the growth of the Mail+ “iPad product”. It now claims more than 100k subscribers for an offering which, in addition to a digital replica of the Daily Mail newspaper, includes puzzles, podcasts, the video show Palace Confidential – and no ads.
With neat timing, owner Lord Rothermere publicly discussed the paywall options after it became clear he would not be able to buy the Telegraph Media Group whose acquisition by RedBird IMI, of Abu Dhabi, was confirmed this week (although it is still subject to UK regulatory review)**.
It had become clear that DMGT’s planned acquisition would not only have brought together two complementary, right-of-centre daily news brands; it would also have helped the Daily Mail to learn from the Telegraph’s success in building digital subscriptions. Despite the doubts about competition issues that would have arisen, it could have been a brilliant strategy.
That’s why all other DMGT options may be under review.
The initial thinking about a Mail Online paywall seems to be that the c1,500 stories published daily would continue to be free but that a paywall would operate once people had reached a daily level of some 10-15 stories. The model is said to be based on Axel Springer’s Bild tabloid, which introduced a partial paywall almost 10 years ago. It is not clear whether Mail+ would continue or whether it would be integrated into Mail Online.
It is, of course, logical that the Daily Mail – as a successful and profitable publisher in print and digital – should seek to develop digital subscriptions revenue, as an ancillary in the same way that “broadsheets” like the Telegraph, Times of London and New York Times generate advertising secondarily to subscriptions.
But the challenge for the Daily Mail may be how best to generate subscriptions revenue without:
- Risking the loss of readers (and hence advertising revenue) at a time when Mail Online is under attack, not least from News Corp’s The Sun and also (ironically) from the Telegraph whose new owners plan to expand strongly in the important US market
- Mixing the message for existing Mail Online readers
- Compromising the steady-ish copy sales of the UK newspaper itself
With so much profit (maybe 40% of the newly-privatised DMGT total) derived from Mail Online, it may be unwise to change the way that the huge digital readership ‘consumes’ it. There is a risk that merely, telling readers they would have to pay after having accessed, say, 10 articles would start to discourage them entirely. How many regular readers of Mail Online’s distinctive showbiz and celebrity content would even know how many stories they actually read each day? Mention of an impending paywall could scare them away – or create new opportunity for The Sun and others.
Would those same readers be disconcerted to see paywalled content on their existing site? Might it not imply that, eventually, they too would be asked to pay for the content they have been reading for years without charge?
The real question might be: The Daily Mail should want to balance its longterm business model with digital readership revenue, but why do anything that might upset the highly-successful Mail Online?
If Mail+ really has a steady-ish 100k+ of paying subscribers, why not invest more in exclusive content (perhaps, especially podcasts and video) and marketing to maximise readership revenues there?
We have an idea.
Given that DMGT might be as worried about the longterm stability of the ads-funded Mail Online as about the need to develop ancillary revenue streams, its 2024 strategy plan could instead combine a Mail+ subs drive with a low-no cost Mail Online membership drive to intensify and secure its audience engagement. Admittedly, that membership could include some “premium” content but it need not look like a paywall or a longterm attempt to change the deal for its readers. That’s the risk to avoid.
These are interesting times for the £1bn-revenue DMGT (60% news, 40% B2B and trade shows) as it navigates a future away from the vagaries of the stockmarket.
**Acquisition of Telegraph Media Group is a two-stage process. The first completed this week when the Barclay family repaid its £1bn+ debt to Lloyd’s Bank using loans from Redbird IMI and directly from Abu Dhabi. The second stage – conversion of the RedBird IMI loan into ownership of The Telegraph and The Spectator political weekly – has been prevented while the UK regulators Ofcom and the Competition & Markets Authority investigate. They are both expected to report in January.
