Growth stalls in readers paying for online news in spite of experimenting with new ways of charging for content

June 12, 2014 12:02 am

Growth stalls in readers paying for online news

By Robert Cookson, Digital Media Correspondent

The media industry failed last year to persuade more customers to pay for its online news services, in spite of experimenting with new ways of charging for content, new research has found.

According to a survey of 19,000 people in 10 countries, conducted by the Reuters Institute for the Study of Journalism at the University of Oxford, only one internet user in 10 was willing to pay for digital news last year – exactly the same proportion as in 2012.

These findings come as traditional media groups, including News Corp and Axel Springer, continue to adapt their business models in an attempt to generate more money online, and offset rapidly declining revenues from print products.

“For many, this remains a battle for survival,” the researchers argued.

In 2012, they had recorded a rapid rise in paying customers, as many publishers started to charge for online news content for the first time. But the most recent survey showed that the growth came to an abrupt halt last year.

However, it did contain some encouraging news for media groups as, even though paying customer numbers remained flat, the proportion willing to commit to subscriptions – as opposed to one-off payments, day passes or app downloads – increased.

Of all those paying for online news, 59 per cent now have a subscription, compared with 43 per cent in 2012. As subscribers generally pay more than occasional customers, they are likely to have boosted the online revenues for many publishers.

This phenomenon is consistent with the findings of another report by US research group Pew that concluded “more revenue is being squeezed out of a smaller, or at least flat, number of paying consumers”.

Of those users who are willing to pay for online news, the majority are from higher income and better educated social groups, the Reuters report claimed.

They tend to favour the bigger and better-known news brands, or those delivering financial news. In the US, 30 per cent of those subscribing to a digital news service chose the New York Times, 32 per cent opted for a local or city paper, and 16 per cent selected the Wall Street Journal.

Elsewhere, the leading subscription publications were The Times in the UK, Bild in Germany, Le Monde in France, and El Mundo in Spain.

But the research found that the majority of web users continues to seek online news from free services, such as the BBC News website and Daily Mail and General Trust’s MailOnline – as well as newer sites such as BuzzFeed and Upworthy.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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