It’s no secret that the ability to publish news online has, to an extent, cut publishers’ ability to control the distribution of news. Sites like Ain’t It Cool News, for instance, became the go-to source of genre movie news to the extent that print publications found it hard to move into that niche.
Meanwhile, a culture of “free news” for consumers was exacerbated by the arrival of vast news aggregtors like the contentious Google News, potentially further squeezing the area in which individual news publishers could convince their audiences to pay.
Small wonder, then, that as digital revenues are becoming increasingly important to legacy publishers, that they’re looking to recalibrate their audiences’ sentiments on digital news, to redefine it as something that deserves to be paid for.
As has been pointed out for a few years now, the disinclination of audiences to pay for news is so entrenched that paywalls surrounding genericised news are tricky to sell, something validated in part by the relaxation of the Sun’s paywall and some other paywalled sites putting some of their content available on free channels such as Facebook Instant Articles.
So the really important question for publishers is as follows:
Are enough people willing to pay for news to make publishers’ paywalls viable, and is willingness to pay increasing or decreasing as the digital environment matures? Or is the concept of digital news being ‘free’ too deep-seated to budge?
Paying for it
According to the Reuters Institute’s latest Digital News Report, the propensity to purchase news online varies wildly between countries, with countries who are already well-served by free news sites typically containing the fewest people willing to pay:
In addition, countries which previously have had greater restrictions on access to the internet, and therefore where there hasn’t been a time in which news content was considered ‘free’, have a much greater propensity to pay. Brazil, for instance, is singled out as being considerably more likely to pay, both in real terms and in future likelihood:
However, as the report makes clear, there’s a distinction between one-off and ongoing payments. One-off payments are typically more common in countries like Spain, while countries like the UK, USA and Australia, where the digital subscription model has been more forcefully tried, have higher proportions of ongoing payments:
So while fewer people are willing to actually pay for digital news in the UK, the value of those that are is significantly higher, not just because those publishers can count on continued digital revenue but also because they provide more data for the publisher through the subscription sign-in process which can then be monetised in a variety of ways. As can be seen by the average median monthly payment, the UK is monetising those that are willing to pay significantly better.
The changing lights
The important question is whether the inclination to buy in the UK and USA will increase – and there’s considerable variance in research on the topic.
In a previous Reuters report, it was explained that: “…our findings are consistent with the recent Pew research report in the United States which suggests that industry activity does not necessarily mean more individuals are paying for news but rather that ‘more revenue is being squeezed out of a smaller, or at least flat, number of paying consumers’”.
However in 2014, the report demonstrated 91 percent of those who hadn’t paid said they were unlikely to do so in the future…
While in 2015’s report the number of people unwilling to pay at any cost had changed to 75 percent, suggesting that there has been some recalibration of people’s willingness to pay.
Moreover, other Reuters studies from previous years suggest that people have been becoming more likely to pay – at least in the UK – for news for a couple of years. In 2013, for example…
Willingness to support
As many UK publishers are betting upon their audiences’ loyalty to support them through subscriptions, there are indications that throwing your lot behind that small but valuable number of people willing to pay is paying off.
As the 2014 Reuters Institute’s report makes plain, of the publications with a subscription model in the UK, it’s News UK that is reaping the most benefit from that small proportion of paying customers:
Although the Sun’s proposition has changed somewhat since, News UK reported last year that they’ve returned to profit as a direct result of their paywall. And while there’s some scepticism about how that number was arrived at, it suggests that the company is making decent amounts of money from that relatively small proportion of people who are willing to pay. The Sun, for example, was reportedly doing well from just 0.4% of the 64m population of the UK as a result of that subscription model.
Additionally, the paywall method is definitely not the only way to get people paying for digital news. Other models do exist. Blendle is essentially a Netflix equivalent for news in which consumers can pay for individual articles, while Pressreader is an ‘all-you-can-read’ subscription model closer to Spotify in model. Meanwhile, Guardian offshoot Contributoria has demonstrated success with its Kickstarter-like approach, and it’s the contention of Stratechery’s Ben Thompson that subscription models work especially well for individuals who have a small and dedicated audience.
If the Reuters report is to be believed, publishers in the UK, Australia and the USA are in a potentially strong position for making money online.
The culture in those countries is shifting back towards the idea that news – especially that which demonstrates expertise – should be paid for, and more people are at least expressing the idea that they might be willing to pay for news again in the future. That’s an important if gradual shift for countries that had that initial period of free news.
Unfortunately, to answer the question of whether digital subscription models are ever truly viable for legacy publishers is woolier. So much depends on their being able to parlay their print legacy into a digital proposition that people are willing to pay for.
By their nature most of the UK newspapers contained generic news and reportage of the sort that niche sites and vast aggregators have made hard to monetise online. Only time will tell whether their audiences are willing to support them when free news is readily available elsewhere.