Who pays for online news?

This week, a report looking at what motivates people to pay for news online and in which ways they are willing to pay was released. Commissioned by Reuters, undertaken by Kantar Media, and funded by Google’s Digital News Initiative, this report synthesises the results of discussion groups in Finland, Spain, the UK, and the US. With vivid and compelling quotes, we can get a better sense of why and how readers are willing to pay for online news. 

The report in its entirety is well worth a read, as it covers both why readers pay as well as barriers to paying for online news, learnings from other paid media, how readers feel about the news industry’s funding challenge, and how readers react to various funding propositions. We’ve highlighted two main points here: why readers pay for online news and in what ways they are willing to pay.

Why do readers pay for online news?

The main reason people do not pay for online news is due to the widespread availability of free news online. Of the  people who do pay for their news, there are six main motivators.

  • Quality: Readers value quality journalism, and are willing to pay for it. 
  • Convenience: Due to the added convenience of news apps, readers are willing to pay for this access to news they can read anywhere.
  • Expert analysis: Readers acknowledge that there is an abundance of free news online, but feel that paid news offers more in-depth insights.
  • Veracity: Some readers seemed to believe that they could avoid the epidemic of ‘fake news’ by paying for their news.
  • Avoid ads: In order to avoid ads, some readers are willing to pay. 
  • Brand’s value: Some readers feel that the news brand they pay for carries a promise of trustworthiness, and so they want to ensure the news brand is able to continue to cover important stories.

What sources of funding are acceptable to readers?

In the study, 15 alternative streams of revenue were discussed with the respondents, to see which advertising and consumer-side proposals would be acceptable to readers. Of the 15, 9 had mixed or negative reactions from the respondents, but 6 were relatively acceptable. We’ve written before about many of these 6 proposals, focusing on how publishers can benefit from them, so it is interesting now to see how readers feel about them. 

1. Soft Paywalls 

Paywalls are a familiar concept with news readers, who recognise the need for paying customers. With soft paywalls, readers generally appreciate the content they are able to receive for free and see it as a taster before deciding if they want to pay to read more. It was described by one respondent as “More like a carrot than a whip” (35-54, Finland). Still, some readers do find it “annoying” or “frustrating” when they cannot read the entire article.

2. Hard Paywalls 

For hard paywalls, respondents describe the model as “quite straightforward” (35-54, United Kingdom), but they do miss the ‘free trial’ that soft paywalls or metered paywalls offer. Still, as we’ve seen from examples such as The Times, with a strong enough brand and reputation, readers are willing to subscribe even without the free trial a soft paywall offers.

3. Membership programs 

We’ve covered how news organizations can use membership programs recently, so it is good to see that respondents feel generally positive about such programs. As our previous article highlighted however, there is still confusion regarding how a membership is different from a subscription, with some respondents even saying that the two are the same thing just using different terminology. For membership programs to be successful, publishers will need to highlight the added value of becoming a member. 

4. Pay-per-use of a bundle of providers

This was the most interesting and appealing proposition to respondents, although it was one of the least familiar. It introduced two new concepts to most respondents: micro-payments and news aggregators. Respondents were generally positive about the benefits from aggregation, even calling it “an amazing idea” (20-34, USA). Still, a few respondents were worried about the impact of aggregators, elaborating “I’m against this. I want the general, holistic picture” (35-54, Finland). There were also worries that the micro-payments could quickly total more than a monthly subscription would cost, with one respondent remarking “That’s going to add up fast” (35-54, USA).

5. Display ads

Display ads are familiar to most readers, and are accepted, but not loved. One respondent described such ads as “what I’m used to seeing” (35-54, USA). As we saw earlier, some readers are willing to pay for an ad-free experience, so there may be a compromise to strike.

The differentiation between the ad and news content make it seem less intrusive than other types of ads, such as sponsored or branded content. This distinction between the intrusiveness of display ads and sponsored or branded content may explain Buzzfeed’s recent decision to finally allow banner-ads on its website.

Still, many respondents spoke of how easy these ads are to ignore. One respondent remarked “I don’t even see the ads” (35-54, FN) while another said “I can filter these out in my head” (20-34, FN). 

6. E-Commerce

For most respondents, there was an obvious consumer benefit to e-commerce as a source of funding for news organizations. It was described as “not intrusive” nor aggressive, with one respondent remarking “I do buy a lot of stuff online” (35-54, USA).

For how news organizations are using e-commerce, we can look to examples such as El Faro, an investigative journalism website in El Salvador that sells books based on its investigations as wells as music and artistic products; Los Angeles Times, which has an online store selling branded clothing, books, and even the press plate sets used for historical moments; or the Mail Newspapers’ online store which sells all sorts of home goods.

The future of online news

From this study we can see that there is hope for the enduring funding challenge for news publishers. New streams of revenue will need to be developed, with publishers focusing on what motivates readers to pay: quality journalism, with a convenient reading experience. 

We’ve created two easily shareable infographics of the six main motivators for why people pay for online news, and six reader-accepted funding sources.


 
 

Mary-Katharine Phillips
Business Development @ Twipe