Tuesday, October 25, 2011

Paid news potential limited on tablets: study

The potential for selling news through applications on iPads and other tablets appears to be “limited,” according to a study released today.

Although consuming news on a tablet is one of the most popular activities discovered in a survey of 1,200 tablet users, only 14% of them had subscribed to a paid news app, according to a study by the Pew Research Center’s Project for Excellence in Journalism in collaboration with The Economist.

Of those who haven’t paid directly for a news app, “just 21% say they would be willing to spend $5 per month if that were the only way to access their favorite source on the tablet,” said the study. “Of those who have news apps, fully 83% say that being free or low cost was a major factor in their decision about what to download.”

The disinclination to pay for the news caused the researchers to conclude that “the revenue potential for news on the tablet may be limited.”

The study found that 11% of U.S. adults have acquired tablets since the iPad was launched in April, 2010, with 90% of tablet owners using them to consume news. Fifty-nine percent of the respondents said the tablet has taken the place of “what they used to get” from a print newspaper and 57% said apps have taken the place of TV news.

On a positive note, 43% of the respondents said they now spend more time consuming news than before they bought their tablets.


Blogger Bob said...

I have no doubt that this study is valid today, but I also suspect that the percentage of people who do pay, and who would be willing to pay, will increase steadily over time.
The economics for subsidized and free content aren't good, and there don't seem to be any forces at play that make the economics better. So over time, paying for online content will become more and more normal.

5:40 PM  
Blogger Jerry said...

Did that response pertain only to paying for "traditional" media (e.g., newspaper websites, CNN, etc.)? How would tablet users feel about paying for specialized news letters relevant to their specific professional/personal needs? (Or, for that matter, how do they feel about paying for highly targeted news via any platform?)

6:30 PM  
Blogger Unknown said...

I agree with both the author and Bob above.
It's true that people are less likely to buy a news app on a tablet while decent free apps still exists, but just like with other apps, in the early stages hardly that many people actually bought apps, they just got the free ones. Then when the quality of the paid apps started to eclipse the value of a free app, people started to pay.
This will happen with news apps as well, it's just such a new market that people need to figure out what value it holds for them, and this is in constant flux.

8:18 AM  
Blogger Unknown said...

I agree with both the author and Bob.

When tablets first launched people were only buying free apps because they were new and impressive and there wasn't a lot of development happening yet. Once the quality of paid apps surpassed the value proposition of free apps however and people started to see the reason for paying for a full app instead of getting an ad-supported free version the landscape changed.

It continues to evolve as well, and I think consumers will only become more open to purchasing paid news apps as they improve in design and functionality and continue to eclipse their free counterparts.

8:23 AM  
Blogger Znakit said...

One of the study's findings was that people pay/are willing to pay for news on tablets because it is, or when it is cheap. One might assume then, that price for access is crucial. But are the tablet prices low? Will they become lower? And if they are lowered, how about the economics of tablets?

@Bob. You seem to be so convinced about the future of paid content. May I ask you what made you think so, and since when you are sure that paying for online content will become more and more normal?

9:05 AM  
Blogger Tom Baker said...

21% of people willing to pay for their favorite source actually sounds good to me. Wouldn't any publisher be happy converting even 10-15% of their free readers to paid ones over time? Not sure why this is being spun as so discouraging.

2:48 PM  
Blogger Znakit said...

Tom, actually the 21% refer to people who are willing to spend $5 or more...
Based on our experience, when you make the price and payment method more flexible, for example, offer a-la-carte access for, say, $0.25, the percentage dramatically increases. This is the story that needs more publicity. Subs do not work for reader as well as small, on-demand payment do.

4:10 AM  

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