Analysis: Pew study shows paywall lessons apply to digital dollars for tablet users
News publishers have a slightly better chance of getting people to pay for news on tablets than on the desktop Web, according to a new study by the Pew Research Center, but still find a majority unwilling to pay.
While 77 percent of tablet owners read news on their devices at least once a week, only 14 percent of them have paid directly for news content. That gap is one of many useful datapoints in new research by the Project for Excellence in Journalism and The Economist Group. The study surveyed more than 1,000 tablet owners to get specific insight on how iPads and similar devices will shape the future of news.
The paid-content outlook gets slightly better if you consider that 23 percent of tablet news readers pay for a print newspaper or magazine subscription that includes tablet access.
But among the 85 percent of tablet news readers who have not yet paid directly for content, there is little appetite to convert. Only 21 percent said they would be willing to pay $5 a month if their favorite tablet news source required it. Only 10 percent would pay $10 a month.
Tablet users are slightly more willing than general Internet users to pay for content. Earlier PEJ studies found only 5 percent of online news consumers had paid for local news, and just 7 percent would be willing to pay for online news of any kind.
Although the tablet pay gap is smaller than the pay gulf for desktop Web users, it remains a large gap unlikely to close anytime soon. So, what is a publisher to do?
The bottom line: Dual approach needed
The lesson for publishers should be this: There is no business model for digital content, but there are business models.
The study finds there is a large audience of casual users who prefer to use a mobile Web browser and not to pay. Tablet owners as a whole are twice as likely (40 percent) to rely mostly on their browser for news reading, as opposed to apps (20 percent).
But, the small audience who prefer apps are “power users” more willing to pay for them. People who mainly use apps for news are more likely to get news daily, to spend more time with news, and to consume more sources, “even to the point of saying the content they get here is worth more than content on other platforms,” the study says.
And here’s the bottom line: “That satisfaction associated with using apps is also tied to more willingness to pay. More than a quarter, 27%, of mainly app users have paid for news on their tablet, compared with just 5% of primarily browser users and 20% of those who use both.”
Rather than bemoan the small number of people who will pay, or freeze out the large number who won’t, the smart publisher will find ways to capture both audiences.
News publishers have found some success online with metered or “leaky” paywalls, which let many readers in for free (preserving traffic and ad revenue), while encouraging their most loyal readers to pay for additional value or convenience. It seems a similar split model may work on tablets, with a free, ad-supported website for all and an enhanced, paid app for power users.
A few other notable points:
- Penetration. 11 percent of U.S. adults own a tablet.
- Substitution. People who read news at least weekly on their tablets say they are getting news they used to get from computers (79 percent), print newspapers or magazines (59 percent), and television news (57 percent).
- Favorite sources. The majority of frequent tablet news users, 65 percent, mostly rely on only one to three sources or apps. The most popular (in order) are CNN, The New York Times and Fox News.