New study: Mass paywall shift could hold perils for newspapers

Posted by Nestor Bailly on December 3, 2009 at 1:24 PM

Media consultancy group Oliver and Ohlbaum interviewed (not just polled) 2,600 UK adults in early November and concluded that paywalls alone would not improve newspapers finances, but a mixed strategy of micropayments and subscriptions would be necessary.

The study suggested that erecting a massive paywall around all content for as little as £2 a month for national papers would not prove popular, especially if all papers did so at the same time.

This is exactly the opposite of what many have suggested as the only way to make paywalls work: Put them up everywhere, so readers have few free alternatives thus must pay. What should be noted, however, is that this clash comes from the differing perspectives on the paywall problem; the O&O study looks at it from the public popularity point of view, while the advocates of simultaneous paywall creation are approaching it from a purely financial perspective.

Micropayments alongside subscriptions that allowed access to most (but not all) content were found to have the best potential for both finances and retaining readers.

"Per article charges allow users to remain promiscuous so would be the best way for the sector to pursue payment from most users, who prefer to mix and match news sources," the report said. "If all newspaper websites charged for access using article charges of 10p, the likely take-up doubles compared to a monthly charge of £2 a month."

The report also suggests ideas for building and rewarding loyal readerships, like opening up exclusive areas, content, and offers for subscribers only. 13% of those polled said they would buy up print subscriptions if bundled with online access, as has been suggested by previous polls.

Interestingly enough, 15%-20% of respondents said they would pay for their favorite news source if it was the only one that charged. This runs contrary to the common logic of the paywall debate, but it can be explained by the appeal of an air of quality and exclusiveness that a single charger can have.

The number willing to pay understandably varied significantly between readers of mass-market publications and those of 'quality' news sources, reflecting the difference between people who care about where their news comes from, about quality journalism, and those who would rather read about which starlet slept with who this week.

For example, O&O cites 26% (a significant portion in polls like this) of people who named the Guardian or Times as their favorite news source would pay £2 a month, while among Sun readers only 15% said they would pay for their favorite source.

Perhaps most importantly, when confronted with a scenario in which all newspapers charged online very few respondents said they would pay anything. O&O said that was because most people use a variety of websites for online news and were unwilling to pay to use all of them, or to drop most and use only one.

The study also predicts an 'Indian Summer' of advertising to end in 2013, when slow growth in that sector will set in again.

"Traditional display advertising revenue across all media will recover from 2010 (although at very different speeds)," the O&O report said. "Traditional classified revenues will continue to fall and will only be partially replaced by new online revenues."

This study brings up some important points, many of which seem to be at odds with previous research. However when taken in the proper perspective, all this data can be complementary. I'll leave it to you to say what you think in the comments section below.

In general, people don't seem to want to pay for online news. Publishers and analysts thought that they could get paywalls to work by essentially forcing people to pay by putting up paywalls everywhere; this new study dismantles that approach, but reinforces the long-standing notion that for people really want and value quality news, a small monthly fee is acceptable. The message should be clear: people will pay for quality, not for filler news they can get anywhere for free.

Source: MediaGuardian