It’s going to be the media issue of the new decade: whether or not Rupert Murdoch can succeed in his plans to persuade newspaper readers to pay for content online.

It’s a grand experiment, with success or failure likely to determine a great deal of the future of journalism.

Today, News Limited blew the bugle by using the front page of The Australian to announce a corporate restructure. The national broadsheet will be spun off into a new division in anticipation that it will lead the push to putting quality content behind paywalls.

The Australian, Rupert’s newspaper flagship in the Pacific region, is being trimmed for the risky new voyage.

But while Rupert has been making his plans, Australian researchers working with the international World Internet Project have conducted their first survey on whether and how much Australians will pay for content online. The results have been released to Crikey, and they are depressing for Rupert.

Seven out of 10 Australians would not consider paying anything at all. Young people were particularly against the idea, with three quarters saying they would not pay.

It gets worse.

News junkies — those who turn to the web for local or national news several times a day — are actually the people least prepared to pay for online news, according to what they told the researchers. Yet those who turn to the web for news once a day are the most likely to pay. Go figure. It should be said that the numbers or respondents involved are small, so the results for this question should be treated with caution.

The survey also looked at willingness of readers to consume large amounts of text online, and found that those who were prepared to read long articles and essays were slightly more likely to consider paying for them — but still under half were prepared to pay.

This suggests that ease of reading could be important, and is relevant to the reports that Rupert’s plans include a “cool new toy” or exclusive deal with one of the e-readers shortly to hit the market.

There are some other interesting variations when the survey results are cross-tabulated by region. The numbers involved are small, so the results should be treated with caution, but they suggest that readers in states with limited access to quality local newspapers are more likely to consider paying for online news. West Australians and Tasmanians — particularly those in urban areas — are the people most likely to be willing to pay for news, although even in those regions the numbers prepared to pay do not top 50%.

This survey was undertaken by the Australian Research Council Centre of Excellence for Creative Industries & Innovation at Swinburne University’s Institute for Social Research, and is part of the World Internet Project, which is the leading international source of research on how people use the internet.

In late 2009, 800 Australian internet users were asked how much they would be prepared to pay to read an online newspaper, given that a daily print newspaper cost about $1.50.

The detailed results, with cross tabulations for age, locality and degree of news-junkiness, will be on my blog later today.

Now, surveys only tell part of the story. It is one thing to ask readers in the abstract whether they would pay for news, when at the moment they are used to getting it for free. How they would actually behave if much of their favoured material became otherwise unobtainable is another issue.

The “cool new toy” is also likely to have an impact. We know that people are willing to pay small amounts for data that is available elsewhere for free, if it is delivered to them on a mobile.

Nevertheless this new Australian data tends to back up other surveys done overseas.

This recent article in The Economist, which quotes a British survey suggesting that newspaper readers are “shamelessly promiscuous” in their online reading habits, and would quickly shift to free online sources if newspapers tried to charge them.

“The theory underlying most papers’ online strategies is that people will buy a favourite newspaper and then go to its website for breaking news and extras such as blogs. But fans of the Daily Telegraph, for example, the most popular quality daily paper, got just 8% of their online news from its website. They spent twice as much time visiting the BBC’s news website and more than twice as much reading other quality papers.”

In the Australian context, the fact that a “cover-all” news service from the ABC will remain free is likely to be a key factor, just as the BBC has become News Corporation’s enemy No.1 in Europe.

On the other hand, another survey by the Boston Consulting Group, gleefully reported by The Australian last year, focused on the kind of stuff people might consider paying for. It came up with slightly more encouraging results, suggesting that almost half of Australian internet users would be willing to pay a small monthly amount for news that was either unique, or timely — such as a news alert service.

However, even this survey concluded that the amounts people were prepared to pay would have only a “negligible” impact on overall industry revenue.

The surveys could all be wrong, of course, and Rupert could be right. We also know that he is not planning to merely replicate newspaper content online, but to offer targeted packages of niche content. This is bound to change the picture.

Nevertheless, at this early stage of the story, you would have to say that the signs are all against Rupert. If he overcomes and succeeds, then the history books might well represent the paywall push as the most significant and audacious part of his already incredible career.

Declaration: I am employed part time at the Institute of Social Research, Swinburne University of Technology. However, I had no role in conducting this research.

Peter Fray

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