Just 5% of readers will pay for online content

Yet more research on why consumers don't like paying for news.

New Media age reports that just 5% of consumers would be willing to pay for a monthly or yearly subscription to a newspaper or magazine to access online content.

The research carried out by Continental showed that of

500 regular newspaper and magazine readers in the UK, 35% would pay 2p per article, 22% would pay 5p per article, 13% would pay 10p and 7% would pay 20p.

adding that

A micropayment model was also disliked by the majority (63%) but compared with the small amount that would pay for a subscription, 21% said they would be willing to pay for individual articles and 11% would pay a larger one-off sum to get access to the whole publication.

Set for a micropayments platform

It looks like UK content owners could have a working national micropayment network by next summer.

According to this report by Paid Content,

A testbed network is already being planned out, after Digital Britain allocated the government’s Technology Strategy Board (TSB) £30 million in June.

It follows this week's announcement of a £6m fund for those with interesting ideas for applications and platforms.

Making money from online journalism is, thus, not just a matter of saying "Let's all start charging."

One of the problems associated with introducing a micropayments system is balancing the transaction cost against the sums collected.

Thus as Robert Pickard says

To create the best industry wide effects, a micropayment payment system would need to include as many papers as possible

but adds that

The fact that a consortium is currently being sought only among the major players illustrates, however, that such a system would be cost inefficient because content from smaller papers would attract fewer transactions and be more expensive to service.

This is one problem with any system but another is picking the correct model.As Robert continues

The biggest pricing challenge, however, is that some articles will be more valuable than others and will be most sought after by consumers. This means newspapers will have to figure out BEFOREHAND which stories fall into those categories and they will have to decide what prices to charge for them.

These are not necessarily skills that media organisations have and

It will require fundamental rethinking of the value chain, what content is offered, and how it is produced. It will also require significant thought about what's in it for consumers--something that is glaringly missing from current discussions of starting online payments.

Why you couldn't charge for Susan Boyle

Staying on the subject of paying for online content,Jon Bernstein writing at journalism.co.uk looks at the problem of micropayments at ITV.

Their recent experience of the multi viewed Susan Boyle which whisked its way around the globe on You Tube,prompted Michael Grade to say that

“We are working on it and watch this space, but we’re all going to crack it, either when the advertising market recovers or a combination of advertising and micropayments which is 50p a time or 25p a time to watch it.
We may move in time, in the medium term, to micropayments, the same way you pay for stuff on your mobile phone. I think we can make that work extremely well.”

However Bernstein argues that it simply won't work describing the Boyle experience as persihable goods that people won't pay for

Quality drama may have a shelf-life and an audience willing to pay for it, but a water cooler moment from reality TV? Not likely.

and that

Micropayments only work if you control distribution which of course using the Susan Boyle analogy,you wouldn't

A model that might work

I get the feeling that micropayments are going to be the talk of the day along with Rupert Murdoch as the WSJ announces that it will introduce payment for individual articles and premium subscription for its website later in the year.

The move is not a surprise as noises have been made by the paper for some time.

And before we all jump on the bandwagon about this opening the floodgates,perhaps one should look at the unique content of the paper which provides value added information for a niche market.

This is the paid model that may well work.

The easy way to make money-make the content valuable

What is the best way to charge for online content? Simple make it so valuable that people want to pay for it.

In the latest contribution to the paywall,micropayment etc etc debate,Gordon Crowvitz writes that

People are happy to pay for news and information however it's delivered, but only if it has real, differentiated value. Traders must have their Bloomberg or Thomson Reuters terminal. Lawyers wouldn't go to court without accessing the Lexis or West online service.

Simple until someone sets up the same operation and gives it away for free.

Ht-Martin Stabe