Seven in 10 Australians aged over 18 say they have no intention of paying for online news, according to new Essential polling.

As online ad rates tumble (and the wealthiest parts of the readership adopt ad-blockers), paying for the cost of producing content has become trickier than ever for news sites that rely on display advertising. With that revenue source shrinking, financially-independent publishers can turn to content marketing, which they can sell for more money than display advertising (because it blurs the line between editorial and advertising), or they can turn to subscriptions and ask readers to pay for the news they consume. But Fusion Strategy media analyst Steve Allen says the horses might have bolted on that one.

Invest in the journalism that makes a difference.

EOFY Sale. A year for just $99.

SAVE 50%

“They gave their news away. So why would [readers] do a pirouette and think, ‘We’ll start paying now’? People expect news for nothing, and for the most part, they can, at the moment anyway, get reliable news for nothing.”

But as print circulations circle the drain, unless Australian publishers can lift online subscriptions, Allen says mastheads will either go broke or will be forced to turn to things like content marketing or “native advertising” to fund their journalism. This risks further eroding the value of their mastheads.

There’s an increasing online divide between publications that do the heavy lifting of bringing new stories to light and those that provide summaries of this journalism. Allen says some content aggregators are profitable, through a mix of content marketing and display advertising. And some savvier readers are able to distinguish between reputable and disreputable information.

But the public’s refusal to pay for journalism has led to a more biased, more self-serving, lower-quality media sector, Allen says. “Many don’t care,” he said. “One day they will. One day, they will wake up and it will be a world full of inaccurate, crappy, self-serving, biased news, and they’ll be going, this will be all shit. At some point, someone will hold up a huge mirror and say, ‘You did it to yourself’. And it won’t come back.”

Who are the ones responsible? According to Essential, 67% of Australian adults say they are reluctant to pay for online journalism under any circumstance. More women than men said they would not pay for online news under any circumstances, with those in the 35-to-55 age bracket the stingiest. News consumers aged 55 and over were slightly more willing to pay for media, while in the 18-35 category, an age-group presumably used to online transactions for music, video games and online purchases, 61% said they had no willingness to pay under any circumstances.

Just 23% of those polled said they would only pay for online news and information if it weren’t available elsewhere.

Allen says Australia’s three major print newspaper companies are reacting to this problem in different ways. News Corp and Seven West Media, publisher of The West Australian, have prioritised their print circulations, while Fairfax has embraced digital-first publishing. This means Fairfax is far more likely to be entirely reliant on online revenues sooner, which leaves it most exposed to a reluctance to pay for content.

Gautam Mishra was director of strategy at Fairfax when it set up its paywall. Now at news app Inkl, which lets users pay for subscriptions to newspapers on a per-article basis or through a flat fee, he says people often don’t know what they’re willing to pay for until they’re provided with a viable product. “Ten years ago if you’d asked people whether they’d pay for music, they would have said no,” he told Crikey. Today, music apps like Spotify, while accused of paying artists too little, are causing millions of people re-evaluate their economic relationship to the music they consume.

When Fairfax conducted market research on willingness to pay before setting up its paywall, Mishra says, there was a significant discrepancy depending on how the question was asked. If people were primed by comparisons to other products they pay for, or asked to pay for concrete packages of news products rather than asked the question in the abstract, they demonstrated a far greater willingness to pay. This suggests selling the news is much like selling any other product — clever behavioural marketing can convince people to pay, even if few are willing to open up their wallets on principle alone.

Five years ago, Crikey covered the results of an academic study overseen by the World Internet Project, which found a very similar figure for willingness to pay for online news in Australia — 70% had no willingness to pay at all. Perhaps the most bullish assessment of online willingness to pay was a survey of 500 Australians done by the Boston Consulting Group in 2009 — which found 49% had some willingness to pay for online news, although the average they were willing to cough up was $3 a month (significantly below what most digital publishers currently charge). Since both surveys were conducted, both major print publishing companies in Australia — News Corp and Fairfax — have established online paywalls on some or all of their publications, and tens of thousands of people have signed up for ongoing, permanent subscriptions. But this doesn’t appear to have changed underlying attitudes towards payment for online news among the broader population. At least, not yet.

When it comes to what they do pay for, the figures show the habit of paying for journalism in print is still relatively strong. Asked whether they occasionally purchase, or have a paid subscription, to printed newspapers, 28% answered in the affirmative. This was eclipsed by those who say they read or view newspapers in print form but never pay for them (35%), but was still significantly higher than the 7% who say they pay for online access to newspapers. When it comes to magazines, 23% said they at least sometimes brought them in physical copy. Only 4% said they paid for access to any news or information websites.

Save this EOFY while you make a difference

Australia has spoken. We want more from the people in power and deserve a media that keeps them on their toes. And thank you, because it’s been made abundantly clear that at Crikey we’re on the right track.

We’ve pushed our journalism as far as we could go. And that’s only been possible with reader support. Thank you. And if you haven’t yet subscribed, this is your time to join tens of thousands of Crikey members to take the plunge.

Peter Fray
Peter Fray
SAVE 50%