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The paywall mirage: More are paying for news, but most aren’t and likely never will

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The Reuters Institute for the Study of Journalism has come out with a mammoth study that looks at the attitudes of consumers towards different platforms and traditional news outlets, and says there has been “a significant shift in public attitudes towards digital news, with more than twice as many people paying for digital news content than a year ago.” Does this mean that media companies can rest easy, knowing that their paywalls and subscription plans are going to become a growing source of revenue? In a word, no.

The Institute, which is based at Oxford University in England, surveyed a total of 11,000 people across nine countries about where they get their news and how they consume it. Not surprisingly, a growing number — particularly younger consumers — are reading or watching the news on phones and tablets, something that other studies like those done by the Pew Center for the People and the Press have also confirmed.

Mobile usage is helping

Those tablet and mobile users also helped boost the numbers of consumers paying for news, since paying for and installing an app counts as paying, even if the content doesn’t require an ongoing subscription. According to the report, about 5 percent of those surveyed said they had paid for digital news in the previous week, and in some countries that number was substantially higher: in France, for example, about 13 percent had paid.

reuters news study1

The Reuters study noted that the number of users paying for news had grown in almost every country surveyed, including Britain, where the figure more than doubled from 4 percent to 9 percent. And it pointed out that tablet and smartphone owners are more than twice as likely to pay for news as those who consume it through a desktop computer. But at the same time, it also pointed out that only about 14 percent of those who were surveyed could ever see themselves paying for the news — although there was some variation in that number (more than 50 percent of those in urban Brazil said they would likely pay).

reuters news study4

But paywalls are only a partial solution

The Reuters data reinforces the idea — one we have argued for a number of times — that paywalls and subscription plans can be part of a digital revenue strategy, but they are not a blanket solution to the problems of the news industry. At best, they will likely appeal to one-tenth of a news outlet’s readers or viewers, and while that revenue is going to help bridge some of the gap created by the decline of print advertising, it isn’t going to fill that gap completely.

One other interesting aspect of the survey is the number of news consumers who literally don’t know where their news is coming from: according to the report, anywhere from 16 to 44 percent of those surveyed said they didn’t notice what sites they were looking at when they were reading the news — something that highlights the rise of social media and the increasing use of news aggregators. Which raises an additional problem: How are you going to get readers to pay for your content if they don’t even know where it’s coming from?

The Guardian referred to the report’s conclusions as “headline news to cheer about for the embattled newspaper industry,” and perhaps that is the case — even a glimmer of good news no doubt seems like a ray of sunshine for the industry at this point. But focusing on the small number of people who are paying risks ignoring the much larger problem of appealing to those who aren’t.

Post and thumbnail photos courtesy of Flickr user Giuseppe Bognanni

8 Responses to “The paywall mirage: More are paying for news, but most aren’t and likely never will”

  1. Very interesting that the Danish figure is lower this year – we’re a very digital nation plus a lot of papers are actually rising their paywalls just now … I dont find an explanation in the report, do you?

  2. Daniel Ambrose

    Lets keep in mind that “most people” never paid for news even pre-web. Most people watched free TV news, or were the “secondary” print readers picking up newspapers someone else paid for. Even when — long ago — some newspapers reached 70% of households in some markets that represented 1 person paying in an average household or 2.5 or so…and still in 30% of households no one was paying.

    So when we try to understand what success is in todays environment, lets keep that in mind.

  3. orielwen

    I consider myself as paying for digital news content, even though I do not subscribe to any paid-for news services. I am a frequent user of the BBC news website. I pay my TV licence although I hardly ever watch broadcast TV, in part because I consider it a payment for the BBC’s web services. I wonder how many other people in the UK feel the same way? This might influence the responses here.

  4. There are some interesting data. But methodological caveat: the survey was exclusively done online. This is ok when internet penetration rate is high, 80-90% or above. But in countries where it’s 50-60%, it skews results, like in Italy, Spain or Brasil. Light news consumers (monthly consumption or less) have been discounted. It’s fine when they make 2-4% of the population, but in the UK, they make 9% of the population and 7% in the US.

    Even though the increase in paid news may be good news for the industry, it must be moderated by the methodology adopted. Paid news only captures loyal news consumers, about 5-10% of the online population, and probably a bit less if the entire population is included. As mentioned, included also are people who have bought a one off paid app, which is much easier to achieve than getting people to buy a monthly subscription.

    So the headline is that 90% of people will not pay for news and companies must find other sources of revenue. Innovation is not their strength, they don’t understand consumer behaviour online and how to create value for them before thinking about revenue. The easy solution, paywalls, will only go so far. The Times of London is a good example of a company that didn’t understand what their readers needed. So much so that they’ve never published clear data about their paywall… I anticipate further financial pain in the industry in the years ahead… unless they try new things.

  5. I think everyone would be surprised at the number of people — in the States, at least — who buy the newspaper for the advertising. The front pages of many Sunday papers advertise the total value of today’s coupons — usually in the hundreds of dollars. It makes $1.50 seem like a huge bargain. They’re not going to get that same value online. It’s only the news they’re getting….which, I totally agree, has very little monetary value to readers, especially when it comes to local news.

  6. Consumers paid for newspapers because they all held local monopolies. They were the ONLY game in most towns and many even kept subscriptions for years even though they disagreed with the politics of the paper.

    Now, it’s a different situation completely. Newspapers are a mess and they’ve decided that they need subscriptions because that’s what they had before….old dog with old tricks. That’s what happens when innovation is scarce…return to what you know, even when it’s not the best strategy. Fact is, they haven’t a clue what to do.

    Very few papers will survive this subscription mess. Eyeballs will decrease further and what revenue they get will not hold down the fort. Many newspapers arrogantly shoved their politics down the masses throats because they could. Now, they’ve been told to hit the road. The AJC in Atlanta is a perfect example and their paywall will hurt them in a big way.