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U.S. Readers Will Pay - But Not Much - for Online News

A recent study by the Boston Consulting Group found that global consumers are willing to pay to receive news - especially from online national and local newspapers - on their personal computers and mobile devices.

But they may not be willing to pay much. The survey of 5,000 consumers in nine countries revealed that the amount they are willing to fork over depends upon the country they live in and on the type of content that they deem most valuable. The average monthly amount consumers are prepared to pay ranges from $3 in the U.S. and Australia to $7 in Italy, writes Marketing Charts.

The research found that:

• 67% of overall respondents and 72% of U.S. respondents are willing to pay for unique content, such as local news
• 63% overall respondents and 73% of U.S. respondents are willing to pay for specialized coverage.
• 54% of overall respondents and 61% of U.S. respondents are interested in timely news content, such as a continual news alert service
• A high percentage of both overall and U.S. respondents are willing to pay for conveniently accessible content on a device of choice.

Consumers also are more likely to pay for online newspaper content than that of other media, including TV, websites, or online portals.

The willingness to spend is only part of the solution, however, because of the current advertising nosedive. Newspaper advertising in the U.S. - which accounts for around 80% of newspaper revenues - is expected by ZenithOptimedia to be at 25% below its 2007 peak by 2011. If consumers start to pay for their news online, it will slow, but not stop, the slide. As a result, newspapers must look to innovate on multiple fronts, BCG said.

BCG says media companies could counter the effects of the slump and benefit from a major boost in profits if they start charging for online news. Moreover, the online subscription model stands to benefit those newspapers with a unique voice and reporting and with strong subscriber bases, in particular national and local newspapers which have content that is not available elsewhere. On the other hand, major metropolitan daily newspapers will likely struggle, BCG said.

Several hybrid models for accessing news and content may emerge. For example, 52% of U.S. consumers of business news would be interested in a bundled print-and-online subscription.

Earlier this year, Outsell released an ominous report that said newspapers were “too slow to make the transition” to a digital revenue models and would need to accelerate their efforts to stem the continuing steep declines in ad revenues.

The New York Times Co. has said it is looking at a paid content model for The New York Time, while its Boston Globe just unveiled a paid digital version. News Corp plans to make the switch to a paid model for all its news sites, beginning with The Times in spring.

About the survey: The survey was conducted via the Web in October. A total of 5,083 respondents participated in nine countries: the U.S. (1,006 respondents), Germany (1,006), Australia (529), France (510), the U.K. (506), Spain (505), Italy (504), Norway (259), and Finland (258). The respondents were equally divided between men and women and among four age ranges. Respondents came from throughout each country, except in Australia, where the results were deliberately skewed toward Melbourne and Sydney.