Consumers Willing to Pay (Pennies) for News

Monday, November 16th, 2009 by Jordan McCollum

Consumers Willing to Pay (Pennies) for News

pile-of-newspapers It seems like every month another news organization toys with the idea of charging for their content. But, we always rejoin, you’ll ultimately sacrifice your audience if you charge for news content. However, the Boston Consulting Group says that may not always be the case—in fact, even Americans are willing to pay for online news.

Well, sort of. The average amount an American was willing to pay for news was $3—and not $3 a day, but $3 a month. Not exactly the profits Rupert Murdoch dreams of, is it?

The survey also found that people were more willing to pay for news that was:

Unique, such as local news (67 percent overall are interested; 72 percent of U.S. respondents) or specialized coverage (63 percent overall are interested; 73 percent of U.S. respondents)

Timely, such as a continual news alert service (54 percent overall are interested; 61 percent of U.S. respondents)

Conveniently accessible on a device of choice

And good news for newspapers: “consumers are more likely to pay for online news provided by newspapers than by other media, such as television stations, Web sites, or online portals,” especially since these other media have so much free competition. Interestingly, while Americans were more likely to pay for sites that offered access to multiple papers, only national and local—not major metropolitan-based papers—have that level of appeal. (I’m not sure which category The New York Times and Washington Post fall into here.)

Marc Vos, a Milan-based partner and leader of BCG’s media sector in Europe, tells newspapers that they “should be experimenting with paid online content. It will take trial and error to find what works.”

The prospects aren’t so bleak everywhere. In addition to 1000 US respondents, the survey also looked at results in Germany, Australia, France, the UK, Spain, Italy, Norway, Finland. While Australians also wanted to pay only $3 (USD?) for their news, other countries saw higher rates. The New York Times said that this may be because Western Europe has more consolidated news offerings, where news in the US is a very fragmented industry.

However, before Western European news sites get all excited, note that the highest amount on the survey, in Italy, was $7 a month.

What do you think? What would you be willing to pay for news?

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11 comments on “Consumers Willing to Pay (Pennies) for News”

Jaan Kanellis Says:

November 16th, 2009 at 3:02 pm

I dont think the fact hat people are willing to only pay $3 is the problem. The problem is they want their news specialized and local. How in the heck is that going to work?
Jaan Kanellis´s last blog ..Google Will Roll Out “Caffeine” Update After Holidays
Andy Beal Says:

November 16th, 2009 at 3:55 pm

If I could get every Marketing Pilgrim RSS subscriber to pay just $3 a month, I’d be delighted!
Paul L'Acosta Says:

November 16th, 2009 at 5:59 pm

Now Jordan, why would I want to pay for a service that’s bringing me the news from the past. Most people are finding out that by simply jumping on Google News you can check what’s happening in the world in less than 5 minutes. Not only because everything is a click away from the source, but also because you can actually get a good sense on what the news piece is about by reading its headline.

If you were watching the news on TV, you’d have to wait for that piece they’ve been teasing you with for an hour (with commercials in between of course). I’d by a paper if the article I’m looking for is worth saving for my grandchildren, for example (.75c can’t beat a good bed story of how things used to be in the past!). It’s not about the money, it’s about the timing.

–Paul
Paul L’Acosta´s last blog ..marketingfails: "It’s so easy to spread information now that it lasts longer and finds more niches" http://bit.ly/4lMYIF
Either 48% or 20% of people will pay for news online ;) « Kindle Review – Kindle 2 Review, Books Says:

November 16th, 2009 at 6:14 pm

[...] Marketing Pilgrim point out that Americans were willing to pay more often for certain situations – 72% of US respondents were willing to pay for unique news such as local news. [...]
Jordan McCollum Says:

November 16th, 2009 at 6:19 pm

@Jaan—I think that just illustrates the problem even more. Local, specialized news at $0.10/day/reader? You can’t afford that. But those sites that are charging for news (including the few that do so successfully) aren’t thinking about a $3/month price point. WSJ.com, for example, is $1.99/week.

@Paul—I don’t think that timing has a lot to do with this. All of the content discussed here is online content—newspaper websites, TV news websites, etc. And considering that every single newspaper subscriber (and anyone who picks it up more than a couple days a month) already pays more than $3, I’d say something about that seems to be working, at least better than online.
David Walker Says:

November 16th, 2009 at 10:37 pm

Interesting discussion, Jordan. We grew up turning to the newspapers for everything newsy and trusted the source. Imagine doing that once or twice daily for over ten years. I think the idea that newspapers provide better content is still ingrained and will take time to phase out so maybe that’s why people would prefer to read their online news at a newspaper site. . I’d be willing to pay $3 for local and international online news, especially when it comes from newspapers As I said, it would take time to phase out.
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Russ Says:

November 16th, 2009 at 11:37 pm

What people SAY they are willing to pay and what they DO pay are two completely different things. It will be interesting to see what actually happens. I will be watching closely.
Mark Mc Says:

November 17th, 2009 at 7:14 am

I was surprised to see that they carried out the survey on the web only – convenient, but could introduce a bias that would make it difficult to extrapolate these results to the whole population.

Personally I do not think that one solution will fit all of North America, Europe and Australasia, where the pace and drviers of change in this sector are substantially different.

Russ Reply:
November 17th, 2009 at 4:57 pm
I was thinking along the same lines myself, Mark. I would like to see the break down of the survey results and the questions asked. It is very interesting that the survey was conducted online – surely that would be biased as people doing surveys online would be more willing to pay for stuff online (at least that would be my guess).

I would love to see the results of the same survey with the typical person in the street.
Dave Doolin Says:

November 17th, 2009 at 4:59 pm

Honestly, this is all so very stupid.

Newspapers could charge $10-15 per month if they delivered a mix of free and paid quality content that people wanted.

But that’s the key isn’t it: delivering what people want, instead of what the news industry wants to shove at us.
Sean Mitchell Says:

November 17th, 2009 at 11:02 pm

At least 3 dollars would be a starting point for them. I’m sure over time they could and would evolve the price and offerings somewhat.

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