Consumers Won’t Pay for Newspaper Content

The story that won’t seem to lie down and die quietly rumbles on as News Corp desperately continues to try to lead their fellow publishers into pay-for-content models. If they could get everyone to follow suit, this strategy may well work – hence James Murdoch’s recent vitriolic attack on the BBC.

This area is being explored this week by PaidContent, who have commissioned a poll by Harris Interactive and asks the question if consumers will pay and if so, how much? And the answer is not encouraging in any way for the publishing industry. Firstly, only 5% of respondents say that they would pay if their favourite website began charging, with 74% saying that they would simply seek out a free alternative. 8% said that they would just read the free headlines, which is quite a clever work. The final 12% said that they didn’t know what they’d do, which I guess is what happens if you include Sun readers in the poll. Only jesting, for those you Sun readers out there, but are you sure you’re in the right place? Sorry, must stop.

If that wasn’t bad enough, the 5% would said that they would pay, consistently chose the lowest possible option they were given when asked how much they’d fork out. 72% said that they’d pay £10 for an annual subscription, 71% said that they’d be prepared to cough up 25p for a day pass and 68% said that they’d pay 1 – 2p to access an article.

If we do some back of the envelope maths on the basis that The Sun has 30 million online users, 5% makes about 1.5 million who would pay. If they each pay the £10 annual subscription that they claim, this would generate £15 million per annum – nice to have, but hardly the windfall anticipated at only 0.005% of News Corp’s turnover. Having said that, if Unique Users plummet like that, advertising revenues will quickly follow suit, so if there are any net increases in revenue, it’s likely to be marginal in the best possible case scenario.

Rupert Murdoch also announced last week that the WSJ is going to start charging for access via mobile, a strategy I suggested here that they explore a few weeks back, so nice to see he’s reading However, while they haven’t yet announced detailed plans, it sounds like they’re going for a pretty obvious and I’m afraid, out of date, approach of sticking content behind a paywall and what’s worse, they’ll be charging mobile users (Blackberry and iPhone anyway) double that paid by PC users – $2 per week, rather than $1.

There’s an enduring myth (one of 10 discussed here) about the mobile channel that citizens will happily pay on mobile for products and services they expect for free online. They won’t. So while the answer to publishers’ woes might involve mobile, they’re going to have to get much more creative in how they approach the problem. The old equation of

Cover Price + Advertising = Huge Profits

no longer computes in digital media. While advertising revenues can still generate a substantial contribution, publishers need to look at new and creative ways to supplement their income, not rely on business models that are more than a century old and are about as valuable as last century’s news.