Elizabeth Benítez is an Event and Marketing Manager at WAN-IFRA. She recently completed her Master of Business Administration at the Hamburg School of Business Administration in Germany. In this article, she discusses the results of a survey she conducted as part of her research for her degree.
The findings indicate that while young readers are still the least willing to pay for digital news subscriptions, they do recognise the value-add in these paid offers. In a nutshell, four determinants influence their willingness to pay: price, new engaging formats, value, and content.
Young readers are willing to pay up to €6 for a monthly digital news subscription – 50% less than the average price (€14.09) across countries.
The respondents were asked to express their intention to subscribe to an online news website and the exact amount they would be willing to pay on a scale from €0 to €15. Responses were analysed based on a price sensitivity method.
According to the results, 23.4% of participants are ready to pay for a subscription vs. 27.9% that do not think they will pay for it. The rest of the sample had a neutral opinion. They would consider paying for this type of subscription perhaps at some point, for example, when their income level increases and pricing becomes less of an issue.
On average, they would be willing to pay €6 monthly, which is less than 50% of the average news digital subscription price across countries. According to the Reuters Institute for the Study of Journalism (Simon and Graves 2019), €14.09 is the average monthly subscription price across six European countries and the United States.
Additionally, the study shows that there is a small number of readers willing to pay a more substantial amount (€8-€15). However, a large percentage of readers are only willing to pay very little (less than €3).
Hence, finding the right pricing and model is crucial for news organisations, as digital reader revenue is becoming a primary financial source, and younger users will become their main customers in the next years.
This suggests that a lower subscription price has a positive effect to increase the young readers’ customer base and that they are excellent targets for premium offerings, such as access to more advanced visualisations, better search functions, or early access to content. Additionally, students’ offers, heavily discounted rates, or short cancellation periods, are a great option to motivate young readers with a strong willingness to pay and turn them into loyal ones.
Adding various types of video, podcasts, or interactive content could increase user attraction, retention, and conversion.
While content is essential to engage young readers, the most critical factor is how it is presented. The formats must be attractive to a mobile-native audience, such as Millennials and Gen Z’ers. For example, The Washington Post is already experimenting with V.R., interactive chatbots, and messaging options. Other publishers have also taken readers on 360-degree experience journeys to other planets, travel destinations, and presidential candidate rallies and debates.
Young readers want news offers that provide high-quality, meaningful, and trustworthy content, but above all, they expect it to be useful and interesting for them.
The study reveals that people’s willingness to pay for digital news subscriptions is correlated with their beliefs about news value. People often use price as an indicator of product quality. They may think, “the higher the price, the higher the quality.”
Equally, if people perceive that a product or service is of higher quality than another product or service, they naturally expect to pay a higher price for it. Furthermore, while content is available for free, readers may be willing to pay for the same information if the quality is better.
News organisations can achieve a strong value proposition by clearly defining what their core competence is. While focusing on being profitable, publishers should not forget that their goal and core competence is to create great journalism. If users consider the offer valuable, they might be more likely to become subscribers.
Additionally, the brand plays a vital role in persuading millennial readers who do not have a firm intention to pay for news. Building a high-value brand that engages readers should be one of the primary goals. In this sense, a strong marketing campaign could offer a product differentiation of the print version, free content, and paid digital offers.
The type of content offered by a subscription influences consumers’ intention to pay. Younger readers value convenience but have high expectations once they agree to pay.
An unwillingness to pay for specialised content was mainly observed among participants. Perhaps it could be explained by a pronounced mentality that digital journalistic content should be free. Despite this fact, surprisingly, the type of content that participants would be most willing to pay for is “Science and Technology”; followed by “Business and Economy.” A lower rating is observed for “Crime and public safety” and “National politics or government.”
One way to increase conversion rates of young audiences is by investing in reader data and curation and (algorithmic) customisation, to display tailored options based on the users’ interests. For instance, some organisations have been exploring this trend by displaying content tailored to users in the trial period as well as through customised newsletters.
In conclusion, it’s important to keep in mind that there is no magic formula to create a business model. Nevertheless, adopting best practices or low-cost changes could maximise the value proposition, drive audience engagement and conversion rates. Additionally, regardless of reader preferences, data and technology remain the basis of digital subscription success.
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About the survey sample:
- The online survey was conducted in June 2020. Placed at the disposal of potential participants on different social media networks among friends and contacts.
- The sample size (355 participants) is typical for these studies, which had samples ranging from 200 to 750 participants.
- 56% of respondents were women, and 43 % men. Also, 1% of the sample belongs to the third gender.
- Respondents were between 24 to 34 years old (76.6%), followed by the category of 18 to 24 years old (23.4%).
- The participants were mainly from Europe, the United States, and Mexico.
- 64% have a university degree and 30% a master’s degree.
- 59% are employed, 23% of students, 11% self-employed, and 7% unemployed.
- About 84% of the sample participants have an annual income under €40,000.