Next Digital prepares to put up paywall for Apple Daily

SC Yeung June 11, 2019 17:03

Having successfully built up large pools of registered online users, thanks to a fresh wave of anti-government sentiment among Hongkongers and growing political activity in Taiwan ahead of the island's 2020 presidential election, media firm Next Digital is preparing to cash in. 

The company, founded by maverick tycoon and democracy supporter Jimmy Lai, has announced that it will charge people for accessing Apple Daily websites in Hong Kong and Taiwan starting from September.

Prior to the official launch of the paywall, Next Digital will first levy a one-off handling fee of HK$3 or NT$10 for each registered user starting from June 17. Once registered users pay the handling fee, they can continue to access the websites without limitation until the end of August.

Before the paywall goes up in September, pricing details will be announced about two weeks before launch.

On Monday, Chairman Lai informed readers about implementation of paywalls for Apple Daily websites through a video announcement. Next Digital will try to keep the subscription price as low as possible in order to keep all registered users and help the publisher maintain its position as an important voice in the community, he said.

Apple Daily had been preparing for the subscription model starting from this year. In April, Next Digital started to implement a membership mechanism for its Hong Kong and Taiwan portals. Both sites have more than 3 million registered users as of now. That offers quite a big scale for Next Digital to implement its paywall.

As Next Digital has around 3.3 million registered users in Hong Kong, it will secure around HK$9.9 million if all users are willing to pay the HK$3 handling fee. In Taiwan, Next Digital has around 3 million users, so it will get around HK$7.5 million based on the handling fee of NT$10. 

While details of the subscription fee aren't known at this stage, Lai has stressed that the firm will try its best to minimize the charge so as to retain as many of the current free subscribers as possible.

The handling fee can be treated as a benchmark for the paywall that will go up from September, with the user numbers studied carefully before the online subscription charges are finalized.

Next Digital hasn't revealed how it will charge subscribers starting from September, whether it will be on a daily, weekly, monthly or annual basis. Currently, the print version of Apple Daily is selling at HK$10 a copy in Hong Kong, and at NT$20 in Taiwan.

It is reasonable to speculate that Next Digital would prefer to charge readers a daily fee in order to ensure the income stream is as stable as it was from selling newspapers. Suppose the daily access fee was HK$3 per user in Hong Kong, a weekly and monthly access fee for local readers would be HK$21 and HK$90 respectively.

If Next Digital successfully converts half of its registered users into paid subscribers, the HK$3 daily access fee could represent an annual revenue of HK$1.8 billion from its Hong Kong websites. For Taiwan, it could generate HK$1.36 billion each year. That means Next Digital could reap around HK$3 billion in subscription revenue from its portals.

That is quite a lot, given that in the financial year ended March 2018 Next Digital's total business revenue amounted to only around HK$1.5 billion.

The subscription model, if it is well-received by readers, could well turn Next Digital business around and the company may secure additional resources to strengthen its print newspaper business in Hong Kong and Taiwan.

As Next Digital finalizes the online access fee for Apple Daily, it would do well to take reference from US media giant New York Times, which has successfully implemented a digital paywall through attractive subscription plans.

Of course, it is quite difficult to predict how Apple Daily readers would accept the subscription model, since they have been enjoying the portal for free for two decades.

But luckily, the timing could not be better as the brand is riding high amid heightened political and social activity in Hong Kong and Taiwan and fresh debates surrounding freedoms and democracy.

In Hong Kong, Apple Daily's relentless coverage of the government's controversial extradition bill and the various protests by citizens, including the massive June 9 rally, has been praised by readers and won the group many new fans.

If the paper keeps championing the causes dear to ordinary citizens and remains unafraid to take on the powerful and the wealthy, readers may not mind a moderately priced online paywall.

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RC

SC Yeung

EJ Insight writer