Wednesday, November 18, 2009

Polls apart on charging for content

With the issue of charging for online content the hottest topic in publishing circles, polls are popping up everywhere purporting to divine consumer sentiment. But they unfortunately are all over the map.

Thus, the surveys are providing neither guidance nor comfort for publishers as they agonize over whether or how to charge for the valuable content they have been giving away for more than a decade.

On the question of whether consumers would purchase news, sentiment ranges from a high of 53% willing to pay in a poll conducted late in the summer for the American Press Institute to a low of 20% in a survey released this week by Forrester, the independent market-research firm. In a third study, also released this week, the Boston Consulting group found 48% of respondents would shell out for news.

On the question of how much the readers who are willing to pay would be willing to pay for content, the API study got an average of $4.64 per month and the Boston study got an average of $3 a month.

The Boston study, which was conducted internationally, determined that Americans and Australians are cheapskates when it comes to how much they would pay for the news. While the average in the U.S. and Australia was $3 per month, the averages for other countries came in higher: Italy, $7; Spain, $6; France, $5; Germany, $5; Finland, $4; Norway, $4, and United Kingdom, $4.

The price points indentified in the various studies are notably lower than the average $8.33 per month that Steven Brill discusses when he attempts to persuade publishers to adopt his Journalism Online payment system.

It looks like publishers trying to figure out what to do clearly have more figuring to do.

18 Comments:

Anonymous Anonymous said...

Isn't a poll for a newspaper group that finds a high number of people willing to pay for news kind of like a poll for a tobacco company that finds a high number of people would prefer most workplaces and restaurants to allow smoking?

10:32 AM  
Blogger Matt said...

You mean lower than Brill's numbers don't you?

Anyway, it's really because practically everyone has paid for information in their life.

Looking at it that way, 100% would be willing if the situation were right.

Unfortunately the situation will more likely be one of "Do I really need or want this?"

Even if the content is great, there is such a glut of decent competitors trying for our attention. . .and that remains the problem with online subscriptions.

The scarcity is now not on the publishing end, but on the time and attention we have to give to all potential items of interest.

I can't keep up with what I have. Why pay for more?

10:34 AM  
Anonymous Anonymous said...

When, oh when, are industry leaders going to learn from the past and trust their gut rather than rely on polls, surveys and expesnive consumer sentiment tests? The consumer surveys were part of the reason we all got in this mess, and polls aren't going to get us out. It takes old-fashioned trust in a news-person's instinct.

5:19 PM  
Blogger Dahve said...

Even if "they" start charging for news available online, the argument isn't on whether people would pay for it. World of Warcraft, doggy sweaters and the home shopping network are hard proof that people will pay for anything.

Consider this: if the music industry is suffering from users illegally copying and sharing .mp3s, won't an almost identical problem arise with news media? In addition, there will initially be a period in which there will be both pay-per-month and free news media; won't the public (who, despite having an ability to spend money irresponsibly, is still love with the word FREE) revert to free sources rather than those who charge?

Until journalists deal with these issues, any attempt of "Charging for Content" will not work.

6:36 PM  
Anonymous Anonymous said...

This will all get sorted out when general-interest publishers roll out different pricing systems and then retreat from them. Just give it a shot. Go ahead. Who's first?

6:41 PM  
Blogger Bill Bennett said...

I viewed these numbers slightly differently.

At the moment most readers of online news flit between a range of titles. For example, I regularly read about six titles and infrequently read a few more.

So, that $4 a month or $8 a month will need to be shared six ways.

Or if one paper captured the entire spend, the number of paying readers per title would be far smaller than most publishers anticipate.

8:09 PM  
Blogger Steve Ross said...

Time was, no one would pay for TV viewing. It was free, over the air, and in most locations 3 channels. Provide the content and the right distribution system/interface and people pay $100/month for "triple play" service, and often $100/month for cable TV alone.

This suggests that over time, people do pay for what they want (with the exception of government services, which all taxpayers think are too expensive...).

But the content got much better before people WOULD pay, and the evolution took 30 years... and now people want the same content free as an Internet service (although ways are evolving to charge less overall once the pay for the bandwidth but give a staggeringly wide choice, perhaps millions of channels).

The answer isn't in polls. It is in evolutionary change, developing content and services that can only be delivered well online, and getting people to see the worth -- not in sending the same stuff.... and it will STILL be ad-supported to some extent.

9:26 PM  
Blogger info said...

It has been our experience that readers will pay for online news, if it gives them something they cannot get otherwise. In our case daily, local news on a more timely basis, especially if the content is based on traditional journalistic ethics and values with the convenience and immediacy of today's technology.

9:27 PM  
Anonymous Jim Donnelly said...

Steve Ross's analogy is very strong. I'd like to take it a step further. In many cases, including my own former employer, the outlets that will face making the jump to a pay model are broken brands, already known for wafer-thin, unreliable content, bled dry by their owners long before the Great Collapse. Everyone talks about great content, which is wonderful and undeniably true. The larger issue is that by shedding both quality and market position, the monopoly dinosaurs have already lost. That's why the startups, in some cases employing "right-sized" workers, are going to devour them. Poetic justice.

6:03 AM  
OpenID Joe said...

What arrogance that we assume readers buy newspapers for the content. When we subscribe to a newspaper we are buying access to a community, not just the contnet. It's the knowledge about, and connections to a particular community that give "content" it's perceived value.

In order to justify the charge news organizations need a unique angle on their community worth paying for. Small community newspaper already have an angle, as they are the only source of information in their markets.

The poll should read "will americans pay for content that has no direct relevance to their unique community or civic life?" And I think we already know the answer to that.

Americans in small well defined communities ALREADY pay for news. Several examples below.

http://www.dailyrepublic.com/
http://www.postregister.com/
http://www.davisenterprise.com/
http://mtdemocrat.com/

10:05 AM  
Anonymous Anonymous said...

I would pay a monthly subscription fee of $10 to an organisation that actively worked to put newspapers out of business.

1:23 PM  
Anonymous Anonymous said...

Everything is higher in Europe anyway.

2:54 PM  
Blogger Herbert Barry Woodrose said...

http://www.thenation.com/doc/20091123/nichols_video

An excerpt from a panel discussion on the future of journalism.

5:12 AM  
Blogger Steve Ross said...

The clip Herb flagged is good for explaining the problem with paywalls and foundation subsidies, but it doesn't lead to a solution, either (the idea seems to be public subsidy through government). None of the zillions of puffed-up conferences and studies really lead to a solution. In part this is because the problem is difficult and in part because the data shows strongly that MOST of the problem is "secular" (due to the recession).

Thus, the conferees focus on expanding revenue at the expense of market share because they assume that the web has already stolen the ad revenue.

The SHARE deterioration is exactly what the REAL problem is. Newspapers raised ad rates through the end of 2007, expanding revenue, profits, and margins but reducing the base of advertisers. THEN they blamed the web for ... well.. reducing the base of advertisers.

Most of the ads will come back after the recession, but the longstanding problem remains. If the operating profits go to investors rather than figuring out ways to expand online revenue (mainly from advertising), the daily newspaper industry is doomed.

Polling under these circumstances is like the city council voting about needed bridge repairs. The council members are split, so they poll the electorate. But if the bridge WANTS to fall down, it will ignore popular sentiment.

8:55 AM  
Anonymous Walter Dnes said...

I disagree with Steve Ross. I believe the lost advertising is *NOT* coming back after the recession.

Chrysler has hacked away at their dealership numbers, and GM is following in their footsteps, in a less draconian manner. That means fewer dealers to buy local ads.

The bankruptcy of Circuit City, etc, and other amalgamations means fewer big retailers. And the effect is worse than just the percentage reduction in numbers of competitors. If competition is reduced, the survivors won't feel the need to advertise, reducing ad revenues even more.

Because they don't have to pay reporters to cover city hall, Washington, and Baghdad, outfits like Craigslist and Kijiji will continue to undercut newspaper ad rates, and take business away from newspapers.

Overall, the future looks pretty bleak. I have another post coming up on "globalization", but it deserves its own post.

4:33 PM  
Blogger Steve Ross said...

Yes there are fewer car dealers (and fewer lots of things) but there are more local business (as national conglomerates break up). There has been NO loss of advertising to Craigslist etc from dailies (just from shoppers). The industry mistook the crop in job classified after 2000 as a non-secular change. But online job advertising actually fell more.

New businesses after the recession will have to establish themselves -- and advertising helps do that.

7:10 PM  
Blogger Bill said...

The paying audience is not subscribers or Joe Reader it is new aggregation sites like Bing, Yahoo and Google.
We need to find a way to make aggregation sites pay for our work of discovery and publication.
The newspapers may physically go away but local news is a commodity which can be monetized in many different ways. Think outside the box!

8:54 AM  
Anonymous Dhyana said...

Here's an idea:

Assume first that a news cooperative of some kind is formed that agrees to not put content on Google (but perhaps might put it on other search engines).

Then, charge consumers $5 per month for access to articles and offerings from these organizations.

Who get's the money? Have each consumer specify the five titles they want full access to. Each gets $1. Then give some kind of tryout service for other organizations in the cooperative.

They can switch their five who get their money at any time.

9:37 AM  

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