How to get people to pay for online news remains the biggest challenge – in many cases an existential one – for a huge swathe of the media industry. The Reuters Institute is well aware of this, and its latest report drills down into the topic using their global survey of news consumers across 20 markets, with extra detail on the US, UK and Germany. The overall picture is one of tough conditions, with cost of living crises and a general reluctance to stump up for news leading to what looks like a flattening out of paying customer numbers. However, the report also provides some insight into what mechanisms might help convince people to become subscribers, and hints at where future growth might be found. Here are some key takeaways:
Is it the economy?
Amid the general squeeze on disposable incomes, it may come as little surprise that news consumers are extremely price sensitive. Almost half of those in the US said they had canceled or renegotiated their news subscriptions over the past year, while that figure was just under 35% in the US and the UK. And that’s despite the fact that paying news consumers tend to be wealthier and more economically insulated.
However, it’s not all just about macroeconomics…
Discounts and relevance
Among those who said they weren’t paying but might, cheaper pricing could be a draw for 18% of those in the US and 14% of those in the UK and Germany.
And the numbers are similar for those who said better value through things like bundles or account sharing, or more relevant/distinctive content, would make a difference. However, price, relevance and value were particularly important to younger people between the ages of 18 and 24, with 41% in the US saying price and or value might make a difference, and 23% saying more relevant content would. That tells us three things: a) discounting heavily to target younger news consumers might help get the habit, b) offering account sharing, at a time when streaming services are cracking down on it, might be a good idea and c) news organisations still aren’t doing a great job of speaking to the youth they need to convert in the long term if they are to survive.
Churn trouble
There is, of course, a snag when it comes to discounts. While they are clearly a good way of picking up new subscribers, particularly price-sensitive ones, the steep shift into full price is causing significant churn. The report suggests that consumers have been “conditioned” to expect discounted offers, making it hard to get them on to what are meant to be standard rates.
This will be nothing new to news businesses – the same dynamics have applied in print – but the report does point out that many publishers are experimenting with deals on renewals and ways to create stepped subscriptions which bring up revenue per customer without scaring too many off. Getting that offer right is going to remain a big focus area that can almost certainly benefit from a lot of optimisation, and indeed is an area where machine learning may be especially useful.
Interested, but not paying
One finding from the survey is both a cause for optimism and an indication that news outlets are not doing all that well at tapping what should be a big market. In the US, UK and Germany, around half of the survey’s respondents said they were very or extremely interested in news. Yet in each market the majority of these people said they weren’t paying for it. The highest proportion of this group paying was in the US, at only a third, and in Germany and the UK it was even lower, at just 14% and 13% respectively.
Differentiation
The key thing people who care about news not paying is why would someone pay for news when there are many other sources of it for free? The survey results provide some insight into how news organisations that believe they merit paying for can differentiate themselves. Of those who said they were paying in the US, UK and Germany, the most commonly cited reason was better quality or distinctive content. That means investing in good journalism, and exclusive reporting, remains key. But the next most cited reasons were identification with the brand or individual journalists, and a desire to support high quality journalism. Both of those are about an emotional connection with a news outlet, something that may sound vague but is, I would argue, something that media organisations can put more effort into by involving their audience in the work, explaining how it’s done and why it matters.
Less important, according to the survey, were a good website or app, and additional products such as games. That might be seen to suggest that those things are actually less effective at driving purchases, but equally we have to remember this is what people say makes them pay, rather than necessarily what is really influencing their decisions. Good tech in particular may not be something that people consciously believe influences their decision, but you can at least bet that a bad experience might make them less likely to stick with a news product.
It’s also worth noting that the proportion of respondents who selected one of the reasons for subscribing was significantly higher in the US for every option except good technology. Pair that with the significantly higher rates of paying for news in the US, and we can not only conclude that US news outlets are doing something right, but also that people being able to articulate why they pay for news probably has something to do with how likely they are to actually do so.
Setting limits
One slightly surprising finding from the survey concerned why people were ending their subscriptions. The more detailed interview work found that some said they felt limited by being subscribed to one brand. Canceling meant they could get their news from a broader range of mostly free options.
This could be used to argue that bundles of different titles (or indeed the related model of micropayments) could be a strategy to increase the numbers paying. And indeed the report cites younger groups’ enthusiasm for services such as Apple News+ as evidence this might be the way to go. I’m not so sure, given the economics of bundled services or micropayments often don’t work out terribly well for the publications that join them. What it does suggest is that a relentless focus on maintaining high engagement, and perhaps some clever curation of content from other sources, might help ensure readers feel guided rather than limited, and like they are getting their money’s worth from their window into the world.
As always with survey data, what people say they do has to be taken with a pinch of salt. But it remains one of the best ways to get some insight into what people think they want in a news product. What this set of data tells us is that getting people to pay for news is going to remain a tough job with or without a cost of living crisis, but there look to be plenty of opportunities to optimise processes and hit the levers that might make those who care about the news, but don’t pay for it, cough up.
