There has been a lot of talk for years now about how print media, also known as ‘old media’, is slowly dying due to the number of readers that have switched entirely to getting their information from the Internet. While it seemed at one time the media companies could make up their lost revenue by focusing more on their online counterparts, and monetizing with advertising, recently the companies have begun to look to subscription models, but that may not be the best idea either.
Rupert Murdoch, the CEO of News Corp, has been touting that the only feasible revenue stream for digital media has been to go to a subscription-only system. Also known as “pay walls”, Mr. Murdoch has been championing this system for some time, and he has been noted numerous times as saying that his properties such as The New York Times would be behind pay walls as soon as 2011.
The problem is that someone seems to have forgotten to ask the general populace what they think about the idea of having to pay for news that has been receiving essentially for free for years now.
Up until now almost all online news sources have been monetized via online ad sales meaning that the content was free for the end user to read. While people such as Mr. Murdoch seem to think that the advertising model isn’t working, he may be in for a surprise to just how uninterested in most people are in the concept of having to pay for their news. According to a new report released by the Pew Research Center’s Project for Excellence in Journalism, only seven percent of the people it surveyed said they would be willing to pay a subscription fee to read the online version of news.
While this is not overly encouraging news, it does differ greatly from a report from the Boston Consulting Group we reported on sometime back that said 48% of online news site users were willing to pay. Why the enermous difference is unclear, but somehow the seven percent number feels a bit more accurate.
The Pew study went a bit further though, and it found that while 81% of those surveyed said they don’t mind seeing ads on sites, 79% said they had never clicked on an ad before.
So, what is new media supposed to do? It looks like people aren’t really willing to pay, and those that look at ads aren’t that prone to clicking on them. About the only solution seems to be some sort of hybrid model. This would be an idea where most sites stay ad supported, but if you want to see the content without ads, you would pay a subscription fee. This model has worked for a number of sites before, and there doesn’t seem o be a whole lot of reason why it wouldn’t work here.
Lets face it, just about every service on the Web wants to go to a subscription model, and while it is understandable to want to do so, at what point will they realize that consumers can only afford so many subscriptions? While it is a nice idea to go this route, if someone has to choose between a Pandora subscription for listening to more that 40 hours a month of music, and they have to choose between an online newspaper fee and their music, which do you think they’re going with? Yeah … it’s not too difficult of a guess.
It would seem online media already has a problem with its revenue stream before it even really gets started. Which method would you prefer to see? Are you willing to pay for some of your online news? None at all? All of it?