80% Of Consumers Say They Would Not Pay For Online Content
In a blow to ongoing plans by Murdoch (and others) to capitalize on premium content, a new study from Forrester shows that 80% of consumers would not be willing to pay for online news content. As readers are able to move from one content aggregator to another with greater facility than the Fed prints another billion dollars, Rupert's approach will likely entail a massive "game theoretical" strategy whereby either all move to a premium model or none do: if even one "defector" remains, it will render the "premium-paid" plan DOA.
In the past year, we've seen a palpable shift from newspaper and
magazine publishers with regard to paid content--they still don't know
how to make paid content work, but they know they want to try. A recent
report from the American Press Institute underscores this trend: The
API reports that 60% of newspaper executives say they're considering paid content options, even though currently 90% don't charge for any content online.
Consumers, though, have different ideas. In a new Forrester report,
we find that most consumers (80%) say they wouldn't bother to access
newspaper and magazine content online if it were no longer free (no
surprise), and the rest are split about how they'd like to pay for
This data suggests two things:
- Publishers should continue to offer free,
ad-supported products to the 80% of consumers who won't pay for content
- Publishers should offer consumers a choice of
multichannel subscriptions, single-channel subscriptions, and
micropayments for premium product access.
But one size won't fit all — consumers want choice.
The need for a multichannel product and pricing strategy is further
reinforced by the "what if" scenario of print being discontinued. When
we asked consumers, "If the publications you read were no longer
available in print, how would you prefer to access that content?" we
found that no single channel dominated responses. Thirty-seven percent
of US consumers say they'd prefer to access content on a Web site, and
smaller percentages say they'd prefer access via portable devices like
mobile phones (14%), laptops and netbooks (11%), or eReaders like the
Amazon Kindle (3%).
Notably, 10% say they'd prefer the anachronistic solution of PDF by
Again, this points to the need for publishers to provide
consumers with choice: There's no one delivery platform, and no one pricing model, that will
satisfy all consumers. Consumer willingness to pay is so modest — and, in general, we find it tends to over-report in surveys — that publishers need to be extremely flexible to accommodate the needs of these precious customers.
While some aggregators of data, most notable Debtwire and its comparable, are able to charge exorbitant amounts of money due to their targeted, highly-focused niches, primarily in the financial arena, it is very unlikely that many will be able to replicate Debtwire's success at charging up to $100,000 a year from subscribers for what amounts to critical, "ahead of the news" data. And with ad spending continuing its death spiral courtesy of the traditionally wealthy advertisers autos and airlines pulling back, the ad model will likely make it impossible for the massive assortment of online content to continue its existence in the current format.
One strategy: a global roll up of all high margin on-line products (i.e., focused blogs), which can still be had for a song. It is surprising that nobody in the mainstream media has considered this yet. An example whereby Thomson Reuters or News Corp acquires all the blogs covering a unique space, and proceeds to charge nominal fees in addition to collecting ad revenue would likely be a very cash flow positive model. As M&A activity in the media spece picks up, we expect the blogosphere to become a place where much more acquisitions and roll-ups become the norm as media conglomerates begin positioning for a dominant presence in any one vertical.