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Ad-free subscriptions ‘a possible next step’

Ad-free premium subscription models may be the logical next step for news publishers to create new revenue opportunities, The Australian’s editor John Lehmann mused during an Advertising Week APAC panel discussion on Tuesday.

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While stating the News Corp Australia-owned masthead was not yet considering the implementation of this option, Mr Lehmann did not rule out a premium subscription tier sometime in the future.

“I certainly think that quality publishers in the future will begin to think about whether giving people the option of having a different level of subscription where they don’t have any advertising at all,” Mr Lehmann said. “It is not something we have thought about seriously at The Australianyet.”

Speaking on a panel called “Beyond the Rivers of Gold”, Mr Lehmann and David Higgins, CEO and editor-in-chief of online news brand Stockhead, discussed the future relationship of journalism and advertising.

Mr Lehmann said “subscription revenue is really the game” for The Australian in the years to come.

However, advertising is still an important revenue stream for the masthead, accounting for 40 per cent of income.

“While we hear a lot about advertising drying up, it still is 40 per cent of our business. The Australian over the past two years has made a profit which really has been based on having strong print advertising revenue continuing,” Mr Lehmann said.

The Australian’s supplemental magazines, including Wish andMansion, have proven to be “very strong among premium advertisers” who want “to be involved in those” products.

The focus at The Australian seems to be very much oriented toward print advertising, with the masthead’s editor dismissing programmatic and digital advertising due to high cost and low return.

“If you are in the programmatic game, it is very, very hard to sustain a business like ours on those CPMs that are charged. I mean, really, it’s a waste of time for us to get too concerned about that,” Mr Lehmann said.

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