4 Types of User Willing to Pay for Online News

photo of newspaper displayThere’s a lot of angst, anguish and apprehension in the newspaper business.

Circulation is down and falling. Readers are old and dying. Revenue is being siphoned off by every upstart on the internet.

And, to cap it all off, the internet also means news is available elsewhere for free.

(There will be a number of media discussions at the Web Summit starting tomorrow. The first is A New Commercial Model for News with Tanya Cordrey of the Guardian, Emily Steel of the New York Times and Stephen Rae of the Irish Independent.)

The challenge for the newspaper business is how to replace revenue in an environment where it looks like no one — with a handful of notable exceptions — is willing to pay.

Maybe it’s time, however, to revisit that assumption because new academic research published in Journalism Practice identifies some groups who will pay for online news.

But before we get our hopes up, let’s look at the reasons identified by author Manuel Goyanes on why people won’t flash the cash:

  • Lack of value attached to online news
  • A culture of free on the internet
  • Online news is a commodity
  • Creation is cheap and undifferentiated
  • Average journalists have the same skills and approach to stories
  • They seek out the same sources, ask the same questions and produce similar articles
  • More competition from outside the journalism profession

Citing other studies, Goyanes said advertising alone is unlikely to be sustainable so “charging for content will likely be an essential part of an effective business model.”

Although online advertising is growing, it is not covering the losses coming from the print side, he noted.

Goyanes reviewed research conducted by the Pew Research Center to determine which factors were likely predictors of willingness to pay (WTP).

They people more likely to pay are:

  1. Younger people over older people
  2. People who have previously purchased software, content, apps or eBooks
  3. Those with a higher income
  4. Moderate, but not heavy, Twitter users (at least once a week).

Reasons

Although less definitive in offering reasons for WTP, Goyanes identified some factors.

Young people are more wired. They are more likely to have tablets and smartphones, and to have already bought digital content using the devices.

“The internet presents a great opportunity for media managers to attract and convince them, since it is the market segment that is most likely to pay for information,” Goyanes said.

On Twitter, the author said moderate users are two or three times more likely to visit a news site than the average person.

Interestingly, non-users and heavy users were equally unlikely to pay.

Approach

The research shows that people are more willing to pay for entertainment than information.

“Online news organizations need to go a step beyond the classical production of information when implementing paid content strategies,” Goyanes said.

“News organizations have to provide content, but also leisure, entertainment and cultural services (through complementary services) according to their understanding of the readers’ demands and needs.”