Page 17 - CIMA SCS Workbook August 2018 - Day 2 Suggested Solutions

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

appropriate type of paywall to set up, once decided then a formal investment appraisal process
involving NPV or APV depending on the financing.

Once implemented there is a risk that people will try to avoid paying for the content and will look
for ways to dodge the paywall, whatever style of paywall FNG implement. If people do find a way
to avoid the paywall then it will not help the revenue. To mitigate this we need to make sure
there is a fair paywall in place, that the content that is provided is worth paying for so most
people don’t begrudge the cost, we will also need to make sure that the system is implemented
correctly to make sure there are as few loopholes as possible.

In the digital age, there is now a huge focus on data - what companies know, are allowed to know
and allowed to use about their customers. Any breach in data protection regulation could be very
costly both in terms of FNG’s reputation but also in terms of financial costs. FNG will need to
make sure that all regulations are met, so potentially increasing the size of our IT department and
representing IT at board level would assist in mitigating this.

Finally, there is a risk that if it is not applied consistently it could devalue the paywall. Some
companies have removed their paywall when a big story has come along to try and increase
website traffic and therefore advertising revenue. FNG must be aware of this risk and resist the
temptation to remove the paywall for major stories as that would alienate the core customers
who have paid for the online content.

Paywall CSR/Ethics

At FNG we have a very detailed CSR policy and so we must consider the implications of restricting
access to our content by implementing a paywall on our CSR policies.

On the positive side there is the argument that we would be increasing the priority of the readers
of our content, as they are now paying customers, in terms of stakeholder prioritisation they
would be more closely matched with our other customers – the companies that pay for
advertising space.

If a metered system was implemented there is an argument that it would encourage “clickbait”
headlines to increase the number of stories that a reader clicks on. It is very easy to sensationalise
a quote or an event in headline form to make the next story even more appealing to click on.

This is arguably even more of an issue if we remained free to the end user by focussing on
advertising revenue, as a higher volume of website traffic makes our site more appealing to
advertisers. Careful consideration must be given to any attempt by FNG to manipulate our local
communities to pay more or spend more time on our website solely to increase our revenue.

We have very clearly stated a commitment to our community as part of our CSR policy. “We aim
to serve local communities by meeting their needs for local news, information and advertising
services through a range of media, with the aim of maximising access to all.” By restricting access
to our website with a paywall, however it is done, we will go against this. It could be argued that
while there is still a printed edition then we will still fulfil this commitment as we state through a
range of media.

There is also the consideration that a newspaper is a shared product, one person in a household
would buy it, but friends and family would all get access to it. Another example is when you go for
a haircut, a newspaper is shared amongst many customers. Consideration must be given to what

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