PwC: Consumers willing to pay for online news

Posted by Leah McBride Mensching on December 3, 2009 at 12:00 AM

People are willing to pay for online news, according to a recent study of 11 countries in North America, Europe and Australia, a senior manager from PricewaterhouseCoopers in the Netherlands told the World Newspaper Congress in Hyderabad today. When asked the question, "If there are no free alternatives, are you willing to pay for an online newspaper?" consumers said they are willing to pay 62 percent of the price of a traditional paper.

"This means there must be a possibility for newspaper companies to develop a proposition for your audience that is economically viable. Of course, if there are still free alternatives, it will be quite hard to do so. But if you have a good proposition, it certainly is possible to get paid for an online proposition," said Marieke van der Donk, senior manager of entertainment and media.

Marieke van der Donk, PricewaterhouseCoopers, Photo: Brian Powers, Western Integrated Media

When it comes to financial news, the value proposition is even higher. The same survey found that people are willing to pay 98 percent of what they pay for a traditional paper, or 98 cents on the euro or dollar. For sports, the number is 77 percent, she said."If you have relevant premium content, and it's not available elsewhere, consumers are willing to pay for it. Our research has proven that," she said, adding that hard news is very hard to charge consumers for.

She also pointed out it is important to "have your strategy in place" and to be "very clear in your subscription model."

The study also looked at how people consume news, and across countries found most use TV and the Internet for news. Newspaper readers spend an average of 33 minutes per day on the news, while online news consumers spend 20 minutes.

"Yet differences between age categories isn't as big as everyone assumes. If they choose the traditional newspaper, they use it because it's for in-depth news, and for a quick overview - it's easy to read. Reasons for using Internet are video, it's customisable and also gives a quick overview," van der Donk said.

Research on mobile and e-paper shows that e-paper is still unpopular, while mobile screens are too small and therefore not that popular for consuming news.

"For every age group and educational level, you see the differences in percentages, but the differences are not that big, so it didn't give us a lot of insight in specific differences for content categories," she said.

Next, Alexander P. Strakhov, chief executive officer of Media3 in Russia, told the audience that Russia is just beginning to fully feel the effects of the global economic crisis.

Media3 is the largest media group in Russia, and at its core are national and local newspapers, both paid and free, with a total circulation of 5.2 billion paid copies. Previously Media3 was composed of four editorial and business offices but have now merged into one single location. They have been able to use the crisis as a positive catalyst to change.

During the merger they noticed four key points to running their business from one office:
1. Think, study and prepare carefully
2. Saving space is higher than expected
3. Cut back but create opportunities
4. Do not damage the main product

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