The paywall mirage: More are paying for news, but most aren’t and likely never will

The Reuters Institute for the Study of Journalism has come out with a mammoth study that looks at the attitudes of consumers towards different platforms and traditional news outlets, and says there has been “a significant shift in public attitudes towards digital news, with more than twice as many people paying for digital news content than a year ago.” Does this mean that media companies can rest easy, knowing that their paywalls and subscription plans are going to become a growing source of revenue? In a word, no.

The Institute, which is based at Oxford University in England, surveyed a total of 11,000 people across nine countries about where they get their news and how they consume it. Not surprisingly, a growing number — particularly younger consumers — are reading or watching the news on phones and tablets, something that other studies like those done by the Pew Center for the People and the Press have also confirmed.

Mobile usage is helping

Those tablet and mobile users also helped boost the numbers of consumers paying for news, since paying for and installing an app counts as paying, even if the content doesn’t require an ongoing subscription. According to the report, about 5 percent of those surveyed said they had paid for digital news in the previous week, and in some countries that number was substantially higher: in France, for example, about 13 percent had paid.

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The Reuters study noted that the number of users paying for news had grown in almost every country surveyed, including Britain, where the figure more than doubled from 4 percent to 9 percent. And it pointed out that tablet and smartphone owners are more than twice as likely to pay for news as those who consume it through a desktop computer. But at the same time, it also pointed out that only about 14 percent of those who were surveyed could ever see themselves paying for the news — although there was some variation in that number (more than 50 percent of those in urban Brazil said they would likely pay).

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But paywalls are only a partial solution

The Reuters data reinforces the idea — one we have argued for a number of times — that paywalls and subscription plans can be part of a digital revenue strategy, but they are not a blanket solution to the problems of the news industry. At best, they will likely appeal to one-tenth of a news outlet’s readers or viewers, and while that revenue is going to help bridge some of the gap created by the decline of print advertising, it isn’t going to fill that gap completely.

One other interesting aspect of the survey is the number of news consumers who literally don’t know where their news is coming from: according to the report, anywhere from 16 to 44 percent of those surveyed said they didn’t notice what sites they were looking at when they were reading the news — something that highlights the rise of social media and the increasing use of news aggregators. Which raises an additional problem: How are you going to get readers to pay for your content if they don’t even know where it’s coming from?

The Guardian referred to the report’s conclusions as “headline news to cheer about for the embattled newspaper industry,” and perhaps that is the case — even a glimmer of good news no doubt seems like a ray of sunshine for the industry at this point. But focusing on the small number of people who are paying risks ignoring the much larger problem of appealing to those who aren’t.

Post and thumbnail photos courtesy of Flickr user Giuseppe Bognanni