Will Apple Daily succeed in its digital subscription move?

After months of planning, Apple Daily on Wednesday officially kicked off a subscription model for the online editions of its Hong Kong and Taiwan newspapers, marking the first step in the efforts by the paper’s corporate parent, Next Digital, to charge readers for online content.

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Registration for the subscription is free at the moment, but there is no doubting the company’s plan: charge a monthly fee in the future after building a substantial registered user base.

On Thursday night, Apple Daily online Hong Kong edition said it achieved more than 1.1 million subscribers in the first day of implementing the free subscription model, while the Taiwan edition recoreded 600,000 registrations.

The strategy comes with risks, even as it offers the potential to generate much-needed income from the online operation which is more of a cost center now than a revenue source.

It all boils down to the question: can the paper afford a paywall for its online portals at a time when media consumers in Hong Kong have become used to getting their online content for free?

No one would dispute the fact that Apple Daily needs to look for new ways to monetize its digital offerings, given insufficient online ad revenues, but the paper’s current market positioning brings some challenges.

Subscription models will work when there is special and exclusive content on a consistent basis and the stories are of uniformly superior quality, giving a reason for people to pay for the online access.

While Apple Daily is known for vibrant content and has earned a loyal fan following, in large part due to its vocal support for Hong Kong’s democracy movement, the paper is perceived as a mass-market offering, rather than one catering to a high-end audience.

This is a key aspect the paper, which was launched in 1995 by maverick tycoon Jimmy Lai, needs to address if it is win enough paying online readers.

It will be difficult for Next Digital to change readers’ habits and get them to shell out cash for online content unless the company provides special and unique content or services on an ongoing basis.

One should bear in mind the fact that media consumers today have plenty of choice in terms of online content, and several portals offer news and information for readers for free.

Apple Daily seems aware of the challenges, going by its decision not to charge online users immediately but only implementing a subscription model.

The first step is to encourage readers to register themselves on the online platform to access the content. The paper has tried to make the registration process as simple as possible. Readers can register through their Facebook or Google account in one click, and users can also log in with their email or mobile phone number.

Prior to implementing the subscription model, Apple Daily online sought to generate as much page views as it could, using the numbers to send a message to advertisers about the reach of its platform. Now, with the launch of the subscription model, it is apparent that it will gradually shift its focus to a paid readership model from an advertising-driven one.

After the new model kicked off yesterday, Apple Daily online is no longer putting out data on the number of viewers for individual stories. Next Digital also ceased publishing total daily pageviews and total daily unique visitors for both Hong Kong and Taiwan portals.

Ahead of the launch of the subscription model, Apple Daily published a series of features that stressed the importance of subscription revenues for the well-being of journalism. The company cited foreign newspapers such as New York Times as examples to prove that subscription model is the future of the newspaper industry.

The New York Times has seen its subscription-first strategy pay off handsomely, with more than 3.3 million people paying for the company’s digital products last year, a 27 percent jump from 2017. Online subscription revenue rose nearly 18 percent to reach US$400 million in 2018, while digital advertising was up 8.6 percent at US$259 million.

The US media titan also reported last month that digital advertising surpassed print for the first time, jumping 23 percent to US$103 million in the fourth quarter.

Pointing out the success of New York Times, Next Digital’s Lai stressed the importance of Apple Daily working toward the digital subscription model. As part of efforts to implement such a model, Apple Daily had launched a mobile money game to lure readers into registering for online content.

The “kill the money” mobile game has been running daily for more than three months, giving away HK$50,000 in each edition and helping bring in thousands of readers every day. However, it remains to be seen if those players would be willing to pay for Apple Daily online subscription to play the game.

Some readers, meanwhile, are not too happy at the fact that Apple Daily is forcing them to provide their personal information such as name, date of birth and sex. From the company’s perspective, collecting readers’ data could, however, be critical if it is to further monetize the Apple Daily online business in the future.

It is worth noting that Apple Daily has seen its online advertising revenue gradually decline in recent years. One of the main problems is that the platform relied on display digital advertising.

As many platforms offer similar content, advertisers have diverted their spending in a bid to reach more readers on different portals. Amid this situation, Apple Daily seems to have realized the need to collect readers’ data and develop its own database.

Once that is done, Next Digital will have better knowledge about its readers, on aspects such as age profile and gender, which will prove useful in pitching customized marketing plans for advertisers.

The subscription model can also help the firm gauge readers’ interests and needs better, so that the editorial team can produce the right content that can boost user “stickiness” to Apple Daily online.

The plans appear to be on the right track, but only time will tell if the media group finds success in its digital strategy or stumbles along the way.

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A columnist in political development in Greater China region, technology and gadgets, media industry, parenting and other interesting topics.

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