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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
content:
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
online; and- 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
email.
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.
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Brand name consumer good are losing pricing power, leading to lower margins, leading to reduced ad spend, leading to Walmart and house brands.
because as soon as you're bought, another replaces it becasue the replication cost is pretty much just labor, yes, i know it takes x amount of time to build an audience, but it only takes five minutes to find another blogger if you don't want to pay who does as good a job for free
Wasn't all this decided about 10 years ago? Not going to happen.
But nice pitch for News Corp to go blog shopping, Tyler. :)
Yes.....and if Tyler succeeds, each of us opinionators can be paid a small fee for each morsel of wit . More if we accidently post something smart.
Wit and smarts. I better not quit my day job.
how about this headline
"80% of consumers are to broke to pay for online content"
That is more realistic...
more realistic is the are too broke after buying the kindle to actually buy the content for the kindle.....
Be nice to the kindle lovers Lizzy...we have lots of free books and you can set up kindle families and share the books. $2 a book is a good deal if you set up your kindle gang wisely. And BTW, this is about Rupert Murdock's idiotic thought that he could charge for content. His cycle is over. No wash, rinse, repeat--OVER.
We're going to have to rename the "Information Age" to the "Free To All Age" (perhaps the "Lou's Tavern Age?").. The concept of paying for media (news, entertainment, etc.) is dead. Rather than owning the actual medium itself, you're better off owning the distribution mechanism.
Watch what happens over the next 20 years between Google and Microsoft.
http://online.wsj.com/article/SB1000142405274870393290457451049367406445...
Isn't Murdoch dead yet?
I thought that was your assignment. Get to it!
I haven't read the WSJ or FT online since they went to subscription, registration, whatever.
And I'm not going to.
Hey Tough Guy... (It's fun to say that and it NOT be an insult.)
I agree. Why pay for WSJ content when you can Google the headline and get the entire article for free?
Ooops. I hope they don't close this loop-hole I've been exploiting for... well... ever.
Yep, google is your friend. Not to mention all of the anarchists who'd post stuff cut-n-pasted from the paid sites anyway.
More to the point, though some articles may be interesting, I'm not getting any actionable information, i.e. I can read this and make a profitable trade based on this data. Not gonna happen. The only folks I see reading WSJ are pasty, middle aged doughboys who want to be seen reading "this important paper" on the train. They read that shit but still have some turd 401(k) or a Schwab account that's not doing jack. It's expensive window cleaning paper, but the online version is even worse since you don't even get to have the paper.
here is a real simple formula for you all to follow:
free content = crap content
paid content = spin content
ol' Rup better look into pay for play media if we wants a bigger check. its either crap content paid for by clicks or its spin content paid for by who the content is about.
welcome to the internet.
Just what we need.
The Post and Faux News by subscription.
Does it get dumber than this?
Yeah, the Times online.
Why would anyone pay for the shit most of these media companies try to pass off as news?
Pay for your own propagandization damn you!
Michigan survey says its closer to 40% but better than expected. I still say RM has some explaining to do with Swiss banking tax cheats.
I'd pay ZH for content given that it's independent and people actually do research here. Aside from ZH, there are very few "news" sites that I consider independent enough to tell me the truth to warrant receiving my money.
I'd pay to read ZeroHedge. But then I'd copy all the material to another location so no one else would have to. There is no wealth like knowledge.
So these 80% of consumers get their internet for free? What business is Comcast in, again?
80% want to switch among multiple sources without paying for the source. It has nothing to do with your ISP payment. I take it you work for one of the networks.
The advertising Google model wins the game....
Wanting monthly pay....would be like not wanting to be in
business....
Because you won't be ....
Heh.. is this your way of putting ZH up for sale? ;)
-LesterB
I subscribed to the WSJ and Barron's online for about 10 years, but the quality of the content has gotten worse and worse and the price has gone up and up so I cancelled my subscription this summer after I saw the automatic renewal charge on my credit card. I think it was up to $179 for a year, or about double what it was a few years ago. I guess they figured the people who paid for it had to have it and they would test the price limit. A couple of months ago I got an email offer to resume my subscription for $89 for a year, which I ignored. I can still access the front page of the WSJ website and much of the content is available to non-subscribers. If they have any "subscriber only" articles of interest, I've found out that if you type the title of the article into Google and then click on the search result, you get the full article. You can only get the first page of a Barron's article that way but Barron's has become so worthless IMO that I don't care.
For many years the WSJ was about the only newspaper that had any success charging for an online subscription. I haven't seen any numbers lately but would be surprised if their online subscriptions aren't way down.
As far as online journalism goes, Clay Shirky has better answers (and a lot of questions too)
http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthink...
i'd rather stick a thousand needles in my eye than watch fox news
And hearing this report, Zerohedge decides to offer DARPA to cash in.
I'd like to thank Mr. Murdoch for breaking my WSJ iPhone app.
The ads still work, but I get no content... Just headlines. If I pay for the content, I still get ads. Can you say broken business model?
All of the subscriber models for financials depend on the marketing of their historical branding. Yet margins are so thin now that their ability to finance serious investigative journalism and balanced reporting is severly diminished.
Most are captive to the shrinking " paper on the driveway " crowd, since this dynamic drives much of their capital costs. This cross they must bear for now will gradually diminish their brand quality until they find a different type of drive for their content. Pretty soon, they'll all be measured in hits......and then it gets really ugly for the dinos.
That's why I'm always wary of the old news guys.......including Murdoch. Bright guys with a long time horizon of experience only need to chase down the wrong rabbit hole once to cause serious consequences for their brand. Like Coke's ill-fated attempt to taste like Pepsi .......the Biggest Most Dumbass Product Marketing Fuckup of All Time !!
I'm not so sure the "buy up the blogs and charge a fee for them" strategy would work. The problem with purchasing any free website with content is that its popularity is due largely to the content on it. In the case of blogs, that content is the bloggers' writing itself.
It makes sense if you want to offer the blogger a lucrative, ongoing full or part time job. However, if you're essentially just buying their domain name, you won't find people lining up to subscribe.
A parallel industry to look at is the Multiplayer Online Gaming genre. About 5 years ago, a couple companies started buying out popular sites. Some were basically blogs and forums, others had detailed information garnered from various online games. The companies doing the buying were, not surprisingly if you know the industry, those who sold virtual "gold" and in-game related items for $. In a couple cases, they hired the former bloggers. In most, it was just an opportunity to put their own ads (and others) directly on a popular, high traffic site.
Again, it was no surprise when many of these sites saw a large decrease in traffic as the content or quality of discussion consumers (in this case, gamers) went there for became stale or otherwise degraded. It was a fascinating example of capitalism at work, though. People who personally hosted small sites on relatively focused topics were paid anywhere from $5K to $100K to "sell out" their domain name.
If large media companies want to go this route, they should look at the success and failure of the gaming industry's example.
American Public: GIBS ME DAT
I can has internetz. Yus.
So.. the NYT thinks differently...
http://www.nytimes.com/2009/11/16/business/media/16paywall.html?_r=1&par...
Fascinating that these articles came through my feeder one right after the other...
Pardon me, please, but in modern news times (back to radio and forward, anyhow) consumers have never paid full freight for their information in what we could call mainstream media before the net (radio, TV, mags, newspapers).
Advertisers always and ever have.
Y'all can now go back to figuring out the next news model for mass consumption, but it certainly isn't going to be the majority of people paying the producers of said content.
Thus, I donate to this here outpost because... well, you smart folks figure out why. :)
Why pay for online content when you can get it for free?
If you want to read an article from say the WSJ which is for subscribers only, just copy the headline or title of the article paste in google and search for it. Google will bring up the article just click on it and now its free!
Anyone paying for WSJ, Barrons, FT, etc. online subscriptions is wasting their money.
20% of people who will is still large, valuable market. However, they tend to be either the most sophesticated of users or the most obsessed. So the content we will pay for has to be either otherwise unavailable or very good. I pay for HBO because they have programming I can't get anywhere else. I get several magazines and the times because, while content may not be perfect, i am very interested in the topics and like to have certain things in print. I want to give my money to news sources who are kicking ass. I was reading an article about the The Washington Post and they were discussing their stratagies to stay afloat "The news for Washingtonians" or some such blather. I thought how about real investigative journalism? You got the biggest crime in history happening under your nose. Hammer the front page with it. Go rogue from the establishment that isn't saving you anyway. Call out politicians, swing open the closets you've protected all these years. I'd buy that. I'd also sure as hell pay for this site. So would many others.
+1
Ironic, from the same paper that gave us Woodward & Bernstein. We need a few of them again. Well, maybe a few isn't enough with all the material available today.
All good points, but look at who (in part) owns WaPo and I think the answer is clear why they're not going at this hammer and tongs.
Or else, someone took their hammers and tongs...
Who would pay to be fed bullshit, while being kept in the dark?
Uh.....the American taxpayer ??
Just occurred to me: isn't that study just illustrating a classic Pareto distribution that is to be expected anyway? Don't know why I didn't immediately think of it with the 80/20 ratio.
They could just go back to allowing cigarette advertising again.
Plenty of money there
I think Murdoch charging for content is a great idea, because his papers are so inane that I don't read them anyway, and if he charges then nobody else will either. I couldn't have planned his downfall better myself.
good call
"A criminal is a revolutionary without the pretense."-CBW
I'd like to ask Murdoch just one question: Which of you publications gave me the heads up in 2007?...Well I guess i won't be paying either.
My toliet has content too, but I don't see anyone paying for that anytime soon, whether I put it online or not....