Are Users Willing to Pay for Their Favorite News Sites?

Among the headlines from the 2010 State of the Media report is that most people are not willing to pay for the news online.

The Pew Research survey for the report is sober reading for an industry struggling to find a business model that works on the web. It found that

Yet even among these most loyal news consumers, only a minority (19%) said they would be willing to pay for news online, including those who already do so and those who would be willing to if asked.

But more worrying for the industry is the way in which people in the US get the news online.  Pew found what other studies have suggested – Americans are a nation of news grazers online, seeking news across multiple sites:

One thing that is becoming clearer is the way people use digital technology to acquire news. The American news consumer is increasingly becoming a grazer, across both online and offline platforms. On a typical day, nearly half of Americans now get news from four to six different platforms—from online to TV to print and more, according to new research from PEJ and the Pew Internet and American Life Project.

This reflects the nature of the medium.The Internet offers an abundance of news and information from local, regional, national and international legacy media, together with a vast array of new media start-ups, both professional and amateur.

It is hardly surprising that Pew found that “65% of online news consumers do not have a site that is so important to them that it stands out in their minds above all other sites they visit”.

The notion of paywalls is based on a 20th century media model, where consumers had a limited set of choices when it came to getting news and information.

The way people now find out about the world has changed. Yes, a small number are loyal and voracious news consumers who may be willing to pay for access.

But the majority are less fussy about the source of their news, and instead will leap from one site to another in their news grazing. And if they come up against a paywall, they will simply go elsewhere for the news.

The question for the industry is whether it can make enough money from the small cohort of loyal consumers.  The New York Times tried this with Times Select. The strategy attracted a small number of subscribers but on balance cost more by limiting access to the select few.

Yet, at the same time, news grazers have limited economic value to advertisers. The State of the Media report suggested:

A successful audience may be about much more than grabbing unique visitors day and after day.  Instead, loyalty and engagement are gaining importance.

News organisations are caught in a bind. A news grazer is not going to pay for the news. But are there enough loyal readers who will pay enough for select content?