APN's NZME sees future in paywalls, growth in share of digital sales

APN News & Media [ASX: APN] has touted a single newsroom concept for its NZME unit in New Zealand, similar to Die Welt's one in Germany, saying an "integrated sales proposition" is helping it win market share, including 20% of the nation's online revenue market.

The media company's strategy to transform its businesses is laid out in an investor day presentation that reiterates what it told shareholders at their annual meeting this month: APN's year-to-date sales are 6% ahead of the year earlier including the contribution from Perth's 96FM, earnings before interest, tax depreciation and amortisation are ahead and net profit is broadly in the same as this time in 2014.

NZME's strategy is to think about content across all platforms as being either news, sport or entertainment. NZME publishes the NZ Herald, a suite of other newspapers, owns radio stations including Newstalk ZB, and consumer sites such as the Grabone daily deal site.

Paywalls would help convert its audience into registered users, who would be offered member benefits in exchange for their data, the presentation says. Monetising the audience would include memberships, subscriptions, pay-per-view and personalised content.

The first of these initiatives is a paywall for its Queensland daily regional newspapers, which will be launched in the second half of this year. In a similar fashion to the New York Times, readers will have access to a limited number of articles each month before being required to pay.

The news comes as the publisher announces plans for the NZ Herald to implement an online paywall later this year.

The company said revenue from NZME is tracking 2% ahead of the same time in 2014 on a like‐for‐like and constant currency basis that excludes $3 million of magazine revenue excluded from last year.

NZME's digital revenue is up more than 50% year-to-date, and online revenue market share has risen to 20% from 16%, it said. The company expects to have co-located its three NZME businesses by February 2016 "which will enable the full benefits of integration to be realised," it said.

“NZME is increasing market share by transitioning from selling products to selling its expanded audiences via an integrated sales proposition," APN chief executive Michael Miller said in a statement. "The low cross‐over of customers in the three businesses is providing revenue growth opportunities.”

Separately, APN's Adshel unit, which isn't part of NZME, said it will begin digitising 35 of its billboard locations in Auckland as part of a broader plan to install 150 digital panels in Auckland, Wellington and Christchurch in the next 12 months.

APN's shares fell 1.7% to 89.5Ac on the ASX and have gained 31% in the past 12 months.

(BusinessDesk)