June 12, 2014 12:02 am

Growth stalls in readers paying for online news

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An Apple Inc. iPad tablet computer with the New York Times website displayed is held up for an illustration in New York, U.S., on Thursday, Jan. 20, 2011. New York Times Co. will charge readers less than $20 a month for full access to its namesake newspaper on the Web when the company introduces its paid service, a person familiar with the matter said. Photographer: Andrew Harrer/Bloomberg©Bloomberg

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.

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