Tuesday, June 20, 2017

When they trust media less, they're willing to pay more

Alfonso Vara-Miguel
A new study of internet users in Spain shows that those who trust "the media" less are more willing to pay for news online. 

The explanation for this counterintuitive behavior is that those distrustful folks "are willing to pay for those specific media that they trust", according to the researchers, Alfonso Vara-Miguel of the  Universidad de Navarra and Manuel Goyanes of the Universidad Carlos III of Madrid.  

(The full text of their article is in Spanish:  "The probability of paying for digital news in Spain," in El Profesional de la Información.)

In other words, trust and confidence have an economic value that media organizations can monetize

Manuel Goyanes
Getting people to pay

Media economists like to say that the Spanish are legendary cheapskates when it comes to paying for any form of media. But the researchers believe they have identified some of the market segments most likely to pay for news

They base their conclusions on the Digital news report 2016, which came from a survey of a representative sample of 2,100 Spanish adults, executed by YouGov and coordinated by the Reuters Institute for the Study of Journalism at Oxford University. The most relevant findings follow.

Versión en español

1. Young people are more likely to pay for digital news. 
Those surveyed were asked "Have you paid for online news content, or accessed a paid-for online news service in the last year?" 10% of Spaniards answered yes, compared with an average of 13% in 26 countries. 

Older news consumers in Spain are less likely to pay for digital news and more likely to pay for a print edition of a newspaper, so in economic terms, print is a substitution for digital. This is different from the U.S., where those who pay for print are more likely to also pay for digital news.

The researchers believe that, because young people consume news almost exclusively on digital devices in Spain, they are more comfortable paying for it. 

2. The higher the level of education and income, the more likely to pay for news. 
Internet users with a higher level of education have a greater interest in news, which the researchers identified as one of the principal predictors of a tendency to pay. Also, if they have higher income, it is more likely that they need specialized content of high quality for professional reasons and thus are willing to pay for it. 

Proportion that paid for news in the past year, by country (click to enlarge)

From Reuters Institute Digital News Report 2016

3. The editorial independence of a publication is an important factor. 
News consumers who perceive that a media organization is free from influence of political and business interests are likely to pay for that publication's content. Again, trust and confidence have an economic value. 

4. Those who are heavy users of Twitter to stay informed are less likely to pay. 
People who depend on Twitter to stay informed are using it as a substitute good, economically speaking, for a digital subscription. Those who answered yes when asked if they had used Twitter in the last week to to search, read, watch, share, or discuss the news were less likely to pay for news online. This finding confirms an earlier study by Goyanes, who showed that moderate use of Twitter was a significant predictor of likelihood to pay for news

5. Sales of daily newspapers have always been low in Spain.
Vara-Miguel and Goyanes did not present data in their study on how much the survey subjects paid for digital news nor for how long. But in an interview, Vara-Miguel (my colleague here at the Universidad de Navarra) pointed out that historically speaking, the percentage of adults who pay for a daily newspaper has been relatively low. At the peak, in 2000, the number of daily papers sold per 1,000 residents in Spain was 104, or around 10% of the adult population.

That figure of 10% paid print circulation is the same as the percentage of people who had paid for online news (see chart above); but it should be noted that online news consumers represent only three-fourths of the population.

In another study by Vara-Miguel, he presented data showing that the traditional news media brands in Spain--TV, radio, and print--had not differentiated themselves sufficiently from new digital natives and thus had little hope of getting people to pay for their online content (“The brand as a differentiator between traditional media and digital natives", original in Spanish, in La prensa digital en España 2016, IME, Institute for Media and Entertainment).

Unless a news organization offers something really different, independent, and of high quality, its content will be considered a commodity and not worth paying for. High quality is essential, he said. 


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