New Study Reveals (Duh) Very Few People Will Pay For News Online

from the ya-think? dept

We've been pointing this out for ages, but a new survey once again confirms that very few people would be willing to pay for news content online. In this case, only 5% said they'd pay for their newspaper if it put up a paywall, with most saying they'd find free alternatives instead. And, I'd argue (as I have before) that even that 5% is quite high. It's a survey, meaning that it's what people say they would do, rather than what they'd actually do. That means, you can probably lop off at least 50% of that 5%. At least. And yet, industry folks still think that 15% will pay? Good luck...

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EU Gov't Study: People Won't Pay For Content; New Business Models Needed

from the wow dept

Just as more and more European countries are trying to ban or block sites like The Pirate Bay, it seems like a few more politicians should take the time to read the new EU study on digital competitiveness (found via P2P Blog). In it, the authors study the question of paid content and "pirated" content, and find that an awful lot of people have absolutely no interest in paying for content, no matter what -- and that the entertainment industry is exaggerating the impact of things like file sharing, since so few people would actually pay for the content in the first place (even if it weren't available for free). Rather than blaming "piracy," the report properly notes that it's a shift in technology (from atoms to bits) that has created the business model problems today:

De-materialisation of creative content distribution is shaking up the business models of the creative industries, with both potential opportunities and potential losses and bringing new players into the media industries' landscape.

It goes on to point out that the answers to these questions aren't going to come from lawsuits, but by recognizing how people (especially younger generations) view such things and putting in place business models that work. Still, the report does hedge in places, talking about the need for a "favorable regulatory environment," though it's not at all clear what's meant by that. But it's good to see a gov't report recognizing this is really a business model (and technology) issue, rather than a legal problem as many in the legacy entertainment industry would have you believe.

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Brill's Pipedream: 10% Of Current News Consumers Will Pay

from the good-luck-with-that dept

There's a pretty simple rule of thumb in figuring out if a new business doesn't know how to approach its market. It's when it claims something along the lines of "well, this is an $x billion market, and we just need y% to be successful." That's someone taking a top down wishful thinking approach. It's a recipe for failure. What you want to hear is the bottom up explanation: how is this business going to get the first customer to sign up, and then the second and third and so on. Claiming you just need y% of a market makes it sound "easy" to get customers, rather than recognizing you have to work at getting customers and actually provide them with something of real value.

So, while we were already really skeptical of Stephen Brill's Journalism Online venture, where he's trying to get people to pay for online news, consider us even more skeptical after hearing that he's going around telling people that he's hoping to get 10% of today's news readers to start paying. Of course, as is noted at that link, most studies have shown you're lucky if you can get 2% of people to pay for something that was previously free. So the 10% number is pure fantasy. But the bigger point is that Brill seems to be making the "we just need y%" mistake, rather than giving anyone a reason to buy.

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Media Dinosaurs Look To Set Up iTunes For News

from the haven't-we-seen-this-before? dept

Well, there they go again. Three big "media" names, who have been trying to convince themselves that there are enough people out there clamoring for someone to give them a way to pay for news, have decided to put together a company that will do just that. Stephen Brill, L. Gordon Crovitz and Leo Hindery Jr. have teamed up to create a system to charge for news, with the idea that any newspaper can sign up and use their system. Clay Shirky calls this an RIAA for news, while Mathew Ingram points out that it may be more accurate to call it an iTunes for news.

The problem, of course, is that this is all based on the faulty theory that people want an iTunes for news. This, of course, is great for other newspapers who know better, and decide to skip out on this plan, and get all the traffic that these newspapers give up. As Jeff Jarvis points out, in looking for news about this very venture, he was blocked by the paywall at some sites, and found the best coverage at a free site.

And, of course, it's especially ironic that Stephen Brill is behind this. That's because he's tried this before and it failed. Miserably. Meanwhile, Hindery in the past has shown that he also is one of those guys who tends to overvalue content and undervalue everything else people do online (communicate, share, discuss). This whole model is based on this single faulty assumption: that it's the news itself that's important to people. It's not. The news is important, but people want to be able to share the news, spread the news and discuss the news -- and you can't do that when it's behind a paywall. The very act of putting up a paywall diminishes the value of the content.

Still, it's a great opportunity for competitors of any newspaper short-sighted enough to sign up for this program.

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