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News Readers Prefer Ads to Paywalls, Says New Pew Report

by Matthew Zuras on March 15, 2010 at 02:15 PM

Pew Research Center's Project for Excellence in Journalism has just released a report outlining the organization's findings on news sites' pay walls and consumer behavior. Unsurprisingly, users prefer ad-financed free news to subscription or pay-per-article models. (After all, why pay if you don't have to?) But online ad revenues fell in 2009 -- for the first time since 2002. While the recession is partly to blame, economists are also wondering whether we are in the midst of a sea of change.

Over half of all American adults receive some of their daily news from online sources. After experiments with online subscriptions in the late '90s (most famously by Slate.com, which abandoned its $19.95-per-month subscriber fee after less than a year), most mainstream news organizations have adopted a model that allows free access with advertising. But online ads are not pulling in the necessary revenue; even though 81-percent of respondents told Pew that they do not mind ads that allow for free access, 77-percent said that they ignore those ads.

There are exceptions with original news sources, such as trade journals and some magazines that provide content unavailable anywhere else. The Wall Street Journal -- the only paper to turn a profit in 2009 -- has had success with its $79-per-year access fee. But most users will look elsewhere for basic coverage if suddenly faced with subscription fees. Having grown accustomed over the last decade to easy and free access, people now simply don't want to pay for news. Even among those who check a favorite news site more than once per day, 82-percent told Pew that they would go somewhere else if asked to pay.

When asked what they would choose if they could choose between payment models, over half of respondents said they would prefer a flat-fee, subscription plan. But, in the meantime, content providers are trying to find alternative revenue streams, such as targeted advertising or demanding compensation from aggregators like Google. As news organizations struggle for revenue, we'll surely see many iterations and hybrids of these models over the next year -- like "freemium" plans, which would allow users to view a set number of articles for free before hitting a pay wall. [From: Pew Internet and Journalism.org, via: Ars Technica]

Tags: internet, journalism, journalism.org, news, online advertising, OnlineAdvertising, pay wall, PayWall, pew, pewresearchcenter, TargetedAdvertising, top

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