News Corp.'s (NWS) Australian unit announced details Tuesday of plans to put its domestic newspapers behind online paywalls as it seeks to extract more revenue from readers searching for news on the web.

From October, national broadsheet newspaper The Australian will go to a "freemium" model for its news--offering free basic stories but charging for premium content such as features. Online access will start at 2.95 Australian dollars (US$3.16) a week, said Richard Freudenstein, chief executive of News Ltd.'s digital business and The Australian.

"A lot of The Australian's content is unique and is of value to its readers," Freudenstein told a conference in Sydney. News Ltd.'s tabloid publications including Melbourne's Herald Sun and Sydney's Daily Telegraph will adopt similar models at a later date, a company spokesman said without providing more detail.

Faced with a tougher market and the free availability of news via online search engines, The Australian is following other News Corp. print titles such as The Times of London by implementing an online paid content strategy. News Corp. also owns Dow Jones Newswires and The Wall Street Journal, which already charge for online content. Freudenstein declined to estimate how many online subscribers News Ltd. will attract but said it was "pleasantly surprised" by market research indicating how many people would be prepared to pay.

Fairfax Media Ltd. (FXJ.AU), which publishes the Sydney Morning Herald and The Age, hasn't said when, or if, it plans to charge online for its major broadsheets. Fairfax already charges online for premium business content in the Australian Financial Review.

"We're not expecting to lose huge amounts of traffic. We could certainly afford to lose some traffic and still maintain our advertising revenue," Freudenstein said.

New York Times Co. said last month that its push to charge the online readers of its flagship newspaper is faring better than expected, with more than 100,000 people having paid for online access since it began charging readers three weeks earlier.

Although The Times of London experienced a sharp decline in web traffic when its paywall went up last year, Freudenstein said it's making more money from its 79,000 digital subscribers than it did from the 20 million unique browsers it used to have.

The News Ltd. spokesman decline to say how much revenue it's Australian newspapers generate each year. Operating income from News Corp.'s global newspapers and information services division in the year to June 30, 2010 of US$530 million accounted for about 13% of group income.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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