New Forrester Report: Consumers Weigh In On Paying For Content

In the past year, we've seen a palpable shift from newspaper and magazine publishers with regard to paid content--they still don't know how to make paid content work, but they know they want to try. A recent report from the American Press Institute underscores this trend: The API reports that 60% of newspaper executives say they're considering paid content options, even though currently 90% don't charge for any content online.

Consumers, though, have different ideas. In a new Forrester report, we find that most consumers (80%) say they wouldn't bother to access newspaper and magazine content online if it were no longer free (no surprise), and the rest are split about how they'd like to pay for content:

Consumers Prefer Subscriptions To Micropayments
It's especially notable that, while publishers talk about micropayments so much you could design a drinking game around the word, only 3% of consumers say they'd prefer this method of payment for newspaper and magazine content.

This data suggests two things:

  1. Publishers should continue to offer free, ad-supported products to the 80% of consumers who won't pay for content online; and
  2. Publishers should offer consumers a choice of multichannel subscriptions, single-channel subscriptions, and micropayments for premium product access.

But one size won't fit all — consumers want choice. The need for a multichannel product and pricing strategy is further reinforced by the "what if" scenario of print being discontinued. When we asked consumers, "If the publications you read were no longer available in print, how would you prefer to access that content?" we found that no single channel dominated responses. Thirty-seven percent of US consumers say they'd prefer to access content on a Web site, and smaller percentages say they'd prefer access via portable devices like mobile phones (14%), laptops and netbooks (11%), or eReaders like the Amazon Kindle (3%). Notably, 10% say they'd prefer the anachronistic solution of PDF by email.

Again, this points to the need for publishers to provide consumers with choice: There's no one delivery platform, and no one pricing model, that will satisfy all consumers. Consumer willingness to pay is so modest — and, in general, we find it tends to over-report in surveys — that publishers need to be extremely flexible to accommodate the needs of these precious customers.

Comments

This report is worth a read.

This report is worth a read. A lot of information here is very useful. memory foam mattresses

WSJ

I read in the WSJ that newspaper publishers want federal assistance due to a decline in ad sales and increased competition from Internet news sources. Excuse me, couldn't these highly paid executives see this storm coming? It's simple economics - new technologies supplant and / or doom old technologies. How many typesetters do you know that are still in business today? PLEASE - follow the micropayment model so you can go out of business and we can all get on with our lives.
microconsole

good analysis

You can still see the unemployment levels are high even after a few years of the recession first hitting. I like the fact that they try to call it a double dip recession vs calling it a depression but if it goes down for travel a couple years, then goes up briefly should it "count" as wiping the slate clean...

Post

Even if we assume the 80% number is correct, does providing free provide higher profit than charging for it?If a newspaper publisher really wants to find customer willingness to pay for content they need to do more targeted study of their readers, use methods like Conjoint analysis to tease out the segments,

Mathew

New Forrester Report

You make a good point about Forrester being a paid content company. We're also a B2B media company, and while we're susceptible to the same macro-trends that other media companies are, B2B media companies have generally been more able to maintain paid products in a MB2-498 free world.

recommendations

I do not agree with your recommendations as well because of the data and methodology. Even if we assume the 80% number is correct, does providing free provide higher profit than charging for it?If a newspaper publisher really wants to find customer willingness to pay for content they need to do more targeted study of their readers, use methods like Conjoint analysis to tease out the segments, how much customers in each value the product and focus on methods that help improve customer reference price before charging for content.

Carl from content lockdown

re: New Forrester Report: Consumers Weigh In On Paying For Cont

The first 20 years of the digital age were about reaping the benefits of new efficiencies, while bolstering old models. The next wave is taking advantage of the new opportunities engage with and build relationships (not just transactions) with a full range of consumers in a variety of different ways (and using a variety of metrics).What is happening to the news and entertainment media is going to happen to many more industries. Is it going to get more complicated? Yes. But the possibilities are just as exciting.

re: New Forrester Report: Consumers Weigh In On Paying For Cont

There is nothing new here and this is not a surprise as the software industry has been facing this issue for years and its getting worse - see http://www.pcprofile.com/Its_Soft_Therefore_Its_Free.pdf

re: New Forrester Report: Consumers Weigh In On Paying For Cont

In order to stay in business, publishers will have to require users to pay in some way, shape, or form. But by offering "many ways to pay" - including cash as well as alternative methods of exchanging value - they can ease the transition. I call it "conditioned access." See the model at http://www.paycheckr.com

re: New Forrester Report: Consumers Weigh In On Paying For Cont

I find it a little ironic that you link to a Forrester report that is $499 while simultaneously commenting on ‘pay for content’ ideas that publishers should continue to offer free, ad-supported products to the 80% of consumers who won't pay for content online. Aren't you a publisher? Shouldn't you be eating your own dog food here? I for one would be fine seeing ads on your site, if it meant reading your detailed reports for free.

re: New Forrester Report: Consumers Weigh In On Paying For Cont

Thanks for all the good comments. @John Harris: You make a good point about Forrester being a paid content company. We're also a B2B media company, and while we're susceptible to the same macro-trends that other media companies are, B2B media companies have generally been more able to maintain paid products in a free world.The scope of the data in the report was solely limited to newspapers and magazines, and did not include questions about B2B or business media.Sarah

re: New Forrester Report: Consumers Weigh In On Paying For Cont

(I tried trackback to your post and it didn't work. )The biggest flaw I find is anchoring – the question clearly reminds that the content has been free. The question was too generic, asking about newspapers and magazines you read and not about a specific newspaper or magazine. The respondents could be thinking of all newspapers, even those they read occasionally while answering this question.There were no questions reminding respondents of value they get or to rank the online news sources by importance. If the question had been,If your most favorite newspaper cannot financially support the free online access, would you be willing to pay in one of the following ways?1. Subscription access to access all online content2. Subscription that combined print, web, and mobile device access3. Individual payment for each article read4. Wouldn’t access them if I have to pay… the results would have completely different.I do not agree with your recommendations as well because of the data and methodology. Even if we assume the 80% number is correct, does providing free provide higher profit than charging for it?If a newspaper publisher really wants to find customer willingness to pay for content they need to do more targeted study of their readers, use methods like Conjoint analysis to tease out the segments, how much customers in each value the product and focus on methods that help improve customer reference price before charging for content.The net is the results are unreliable and recommendations are plain wrong.-rags

re: New Forrester Report: Consumers Weigh In On Paying For Cont

I read in the WSJ that newspaper publishers want federal assistance due to a decline in ad sales and increased competition from Internet news sources. Excuse me, couldn't these highly paid executives see this storm coming? It's simple economics - new technologies supplant and / or doom old technologies. How many typesetters do you know that are still in business today? PLEASE - follow the micropayment model so you can go out of business and we can all get on with our lives.

re: New Forrester Report: Consumers Weigh In On Paying For Cont

Oh - and to the guy from www.PayCheckr.com re: "conditioned access" - seriously, get a life. Just because YOU make payment software doesn't mean people will pay for newspaper content - tho' I'm certain you're pitching the industry to use your platform.