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.

Forrester submits:

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:

  1. Publishers should continue to offer free, ad-supported products to the 80% of consumers who won't pay for content online; and
  2. 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.