As a result, most people are happy to pay nothing at all for news, even as they have come to accept paying for other forms of digital content. A 2010 study of 1,000 adults commissioned by AOL showed that about four in ten people pay for “online content”—but that was a broad definition, including music and video.
Only 4 percent said they pay for online news. A Pew Project for Excellence in Journalism survey in January 2010 found little interest in paying: among “loyal news consumers, only a minority (19 percent) 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.” Another Pew study in January 2011 showed 23 percent of respondents who say they would pay $5 a month to get full access to a local newspaper online; that dropped to 18 percent when asked if they would pay $10 per month.
Some say such surveys miss the point. Porous pay systems like The New York Times’s are being erected precisely so they will capture only the most devoted users. And a hypothetical question in a poll might not capture true sentiment. “Don’t survey based on what people say they would pay,” says Aaron Kushner, an investor who is mounting a bid to buy The Boston Globe from the New York Times Co. “No one expects to pay for news, so why would they answer differently?”
But even if pay schemes attract users, it’s hard to charge enough to produce a great deal of revenue. Kushner argues that most publishers are making the same mistake now that they made years ago. “The problem is they’re basing the price on cost or history rather than value. Forget pricing on cost,” he says. If anything, he says, digital editions should be more valuable because of their archives and interactivity. “Figure out what is the value of the product and then price against it. Publishers have been undervaluing their product for too long.”
There is, in some publishers’ pay plans, an aura of frustration over the inability to convert large online audiences into advertising revenue. Moroney, of Dallas, is simply being more candid than most when he notes that much of the News’s online ad space goes unsold, and so a cut in traffic to the site will have little financial impact. Others, such as Albert Sherman of the Newport Daily News, frame a paywall as a way to protect the print edition, but some print circulation has already been lost because of free alternatives.
The best chance to make headway with pay schemes is likely with a device that people can hold in their hands. For most mobile phones and tablets, a commerce system is already in place, and the transaction is straightforward. Moreover, consumers have shown a willingness to pay for content on mobile devices, whether that involves ringtones or sports videos. So if publishers really hope to expunge the “original sin” of giving away content free online, they may be best positioned to do so not on the computers where they first gave away their wares, but on mobile devices that offer a more welcoming environment.
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