The Potential Value of Online News

Posted on 23. Jun, 2009 by in Paid Content, Revenue

Photo from PWC's "Outlook for Newspaper Publishing in the Digital Age"

Photo from PWC's "Outlook for Newspaper Publishing in the Digital Age"

Here’s a sign that news still has some $ value.

American newspaper consumers are willing to pay 68% of what they spend on their daily papers when it comes to online news, a PricewaterhouseCoopers study shows.

Whether or not that’s enough to sustain an online-only business model (considering the lack of advertising dollars floating around the internet,) it’s the highest national average out of more than 4,900 interviews conducted in seven Western countries.

On the other end of the spectrum, newspaper consumers in Holland are only willing to pay 38% for online news. Perhaps when information can be freely shared the phrase “going Dutch” loses its meaning.

The other five countries included in the survey — Canada, France, Germany, Switzerland and the U.K. — fall somewhere in between America and Holland, while the total average for all seven regions amounts to 62% of current newspaper payments. Of course, that doesn’t factor in the elimination of printing costs and pressman unions, or the issues of content piracy and advertising revenue for online media. But it’s a start to mapping out a foreseeable new landscape.

And while most of the readers surveyed say general/breaking news is more important to them than any other type of coverage, they also say it’s not the kind of news they’re likely to pay for. Instead, financial news ranks the highest with 97% of the respondents willing to pay for the content. Sports news ranks second highest with 77%.

The greatest potential for paid online news can be found in specialized, targeted and relevant information, the study reconfirms. In other words: people are willing to pay for tailored content that’s harder to find for free.

On the upside for non-financial and non-sports journalists, “that creates both an opportunity for advertisers to reach their consumers and for newspapers to develop ‘hyper-local’ or ‘local-local’ sites addressing content at the neighborhood and suburban level,” say Marcel Fenez and Marieke van der Donk, who wrote the accompanying report. And that gives the U.S. a lot of legroom to create new business models for journalism.

But while there is plenty of untapped potential for online growth, PricewaterhouseCoopers contends that print news will remain the largest source of revenue for newspaper publishers “for some time.”

Disclosure: I still buy print newspapers.

Click here to view the full report, including charts.

Click here for an online-only revenue outlook by our comrades Jeff Mignon and Nancy Wang.

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One Response to “The Potential Value of Online News”

  1. paul torpey

    07. Jul, 2009

    Damian, this was very interesting. I used to read the print copy of the NYT most days and every Sunday but no more. It’s so much easier to read it all on line wherever I am and it’s free to boot. I guess they make up some of the lost revenue with the advertising and when you think about it I wonder if the subscription revenue is enought to offset the NYT distribution costs for hard copy??
    You also kill fewer trees and throw less paper into the local trash bins.
    I think internet journalism is the direction it’s going and if you have to pay to download a tune, why should you complain to pay for i-news?