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Times are tough in the news business. According to the 2010 State of the News Media report (released yesterday by the PEW project for excellence in journalism) consumers don’t want to pay for news, and they aren’t particularly interested in clicking on advertising, either.
Only 35% of online users have a favorite site (though roughly half get their news from a small group of sites) and of those, only 19% said they would consider (or are already) paying for continued access to said favorite site. This means that roughly 7% of internet users, right now, are willing to pay for their news.
Of those willing to pay for access to a favorite site (54%) opted for the subscription model over a micro payment a la carte system.
Click on chart for full report
It would be fantastic if people were willing to click on ads in return for free news, but that isn’t supported by the findings, either. Only 21% of online news consumers said they clicked on advertisements “sometimes”. That number does increase to 37% if you limit the respondents to heavy users (who visit at least six sites daily). 21% is a lot better than 3.5% (who would be willing to pay for a paywall), but it’s not nearly enough to cover the cost of maintaining an online presence.
None of this is good news for the news people. In January, The New York Times made big waves when it announced that next year it would roll out a “Freemium” model — where anybody could read a set number of articles for free — and if a consumer wanted more, they would have to pay a small monthly subscription fee.
That sounds reasonable on the surface, but based on the survey results, readers would probably read their monthly allotment, and then move on. Furthermore, the Times pledged that pages readers get to from outside sites won’t count. Since the study also shows that “Social media sites and blogs have helped the news become a social experience in fresh ways for consumers. People use their social networks to filter, assess, and react to news” and page views from external links won’t count, many analysts were unimpressed by the possibilities.
There are a couple of lessons here. As long as consumers can get something for free, it isn’t going to be easy to convince them to pay for it.
For paywalls to work, there needs to be a major shift in how we use the internet. The idea that everything should be free doesn’t really make any sense, but as long as people think that way paid models won’t work.
Back in November of 2009 Rupert Murdoch was so mad at google that he threatened to de-list all News Corp sites from the search giant. The blustering was fairly well laughed off on the blogosphere, where sharing, curating, and embedding make for social currency. Good fences may make good neighbors, but not online.
Are there alternatives? There better be. Online media has heralded a enormous democratization of the news, and multimedia tools make for some really fantastic stories. It would be a shame if no one could afford to produce them. At ABM, we’re giving this whole Internet thing a try. We put a lot of time and thought into our new website, and we want it to work.
So. What do you think? Is online news doomed to be a no-win situation for producers? What would you pay for? How much would you pay for it? And for that matter, what do you think of the site?
