Only 2.4% subscribe at newspaper pay sites
A puny 2.4% of print subscribers is the average number of people paying for online content at the handful of daily newspapers that have been bold enough to erect pay walls, according to a new survey.
In the first comprehensive study of actual consumer willingness to pay for online news, ITZ/Belden Interactive delivered both good and bad tidings to publishers hoping to begin charging for their content.
The bad news, of course, is the limited number of online readers who were willing to pay for online access to the 26 U.S. dailies included in the survey.
The good news, as you can see in the table below (click to enlarge), is that the few consumers who are willing to pay for online content appear to be largely indifferent to how much it costs. (Clarification 1.12.2010: The survey lumps together all forms of paid digital offerings, including not just pay walls but also electroic editions of papers.)
The full survey is available here for $599.
The study found that only two papers – the Key West (FL) Citizen and the Bloomington (IN) Herald Times – were able to sell online access to a number of subscribers equal to 4% or more of their print circulation. If you factor out those two outlying publications, the average online penetration of the remaining 24 papers – which together have more than 1 million print subscribers – is an anemic 2.1%.
But wait, it gets worse. Because only about a third of American households subscribe to newspapers, the survey suggests that the actual average penetration of pay sites is at best 0.7% of total households.
As for the good news in the study, publishers will be cheered to know there is “little to no correlation between price and uptake,” said Greg Harmon, the lead researcher for the project conducted in conjunction with the American Press Institute.
Even though the Newport (RI) Daily News charges $420 annually for online access, its 1.7% penetration rate is identical to that of the Colorado Springs (CO) Gazette, which charges web subscribers only $1 a year.
This suggests that publishers who start charging for access to their websites can ask pretty much anything they want. They evidently won’t get a lot of takers but that may not matter to publishers of small and medium papers facing scant competition in isolated markets.
“It is typical that newspaper sites in small and mid-range markets sell less than half of the available banner inventory to local advertisers,” said Harmon. For publishers who sell a limited number of online subscriptions, he continued, “a decline in page views poses little or no risk to revenue.”
The story would be different, said Harmon, for metros and other papers that depend on lots of page views to generate online ad revenues.
Noting that there is no one-size-fits all solution to charging for content, Harmon said paid access is not going to be the “silver bullet to save the newspaper industry.”
To the degree its is successful at all, he continued, publishers have to approach charging for content “as a new business opportunity, not simply as a means of walling off content to defend print.”