PAYWALLS AND ONLINE NEWS

A PRESENTATION BY OLIVER & OHLBAUM ASSOCIATES, WESTMINSTER MEDIA FORUM

The Royal Aeronautical Society, No.4 Hamilton Place, London W1J 7BQ
2nd December, 2010
MONETISING NEWS ON THE WEB
Who delivers the paper?

Only 5 per cent of respondents who were regular specific newspaper title buyers had a direct subscription with that
newspaper

Where do you buy the following national newspapers?

Direct
subscription

Newsagent
delivery

Supermarket

Newsstand /
newsagent

Source: O&O Survey, November 2009 (n=2,600) 2

 MONETISING NEWS ON THE WEB
Online promiscuity versus loyalty

Less than 10% of online news consumption is attributable to the website of the respondent’s claimed favourite newspaper

Online newspaper habits by newspaper readership loyalty (i.e. named favourite newspaper)

Other

News aggregators

Other TV news

BBC

Local paper

Quality press

Mid-market press

Popular press

Own site

Index of total use

107 90 130 98 62 89 63 84 177
(average = 100)

Source: O&O Survey, November 2009 (n=2,600) 3

MONETISING NEWS ON THE WEB
The issues with micropayments

Micropayments have been heralded as providing a potential solution to low advertising yields online but there are
significant issues associated with such payment models

PROBLEM INDIVIDUAL COMPANY PERSPECTIVE SECTOR PERSPECTIVE

• Needs 5-10% take-up to be greater than ad

• If sector ad revenue share is largely a
revenues
ADVERTISING SACRIFICE zero-sum game then micropayments
• Undermines overall reach proposition if done on a
likely to add to total revenues
large scale

• Need to find a mechanism to punish “free

• If we charge, others find it optimal to offer content riders”
“FREE RIDER” PROBLEMS
free • Or, hope there is little substitution
between providers

• If not currently charging for news in core business

UNBUNDLING ESTABLISHED then extra revenue potential • Need to co-ordinate price points between
PAY MODELS • If established newspaper, could cannibalise and unbundled and bundled payments
dilute revenue if don’t get bundling right

• Need to find a way to distribute revenue

• Content “packagers” under threat from being cut out
DISINTERMEDIATION to incentivise all players along the value
by platforms / content owners
chain

Source: Oliver & Ohlbaum Analysis 4

MONETISING NEWS ON THE WEB
The rise of mobile access to news

Smart phones are encouraging people to consume news via mobile devices…and some even pay for it…but a third say it
is likely to make them spend less on traditional newspapers…
% of respondents who regularly access news via their mobiles % of mobile users less likely to pay for newspapers (due to availability of news on mobiles)

% who pay for

news on mobiles

21%

14%

18%

Source: O&O Survey, November 2010, (n=1,459) 5

MONETISING NEWS ON THE WEB
The rise of TV news on the web

There has been a rapid increase in video access via mobiles, UGC is still important, whilst news and TV channel content
is growing…
% respondents who have watched video clip on mobile phone % of those who have watched via mobile – what
over last 12 months have they watched?

A bit 2009

2008 8 2
A lot
“DIY”
Material
2009 12 4 2010

2010 33 10

0 10 20 30 40 50

16 to 24 42 20

25 to 34 37 16

35 to 44 33 7

45 to 54 27 3

0 10 20 30 40 50 60 70

Source: O&O Survey, November 2010 (n=621) 6

MONETISING CONTENT ON THE WEB
The Times paywall

Uptake of Times online (via any device) among The Times newspaper readers was quite strong. For those previous Times
online users not choosing to subscribe, the most popular alternative online source to move to was the BBC…

Use of Times website before paywall How did readers react to the paywall? Where did those who moved shift to?

% of readers

Other /
Not sure

Use other
free sites

BBC
Never website

Just
stopped
Other TV
using
News
Times
Less than site News
once a aggregators
week
National
At least Subscribe newspapers
once a in some Local
week form newspapers

Source: O&O Survey, November 2010, (2,737 respondents) 7

AND FINALLY…

 GOOD LUCK OR FIND OUT MORE

“MAKING MONEY IN THE ON DEMAND MEDIA AGE”

Wednesday, December 8th, 2010 – 9.30 AM to 12 NOON

Invite only (But FREE)

O&O / LONDON SCHOOL OF ECONOMICS

THE LINCOLN CENTRE, LINCOLN’S INN SQUARE

To get an invite
Call: 020 7 313 5900
Email: andrea.toth@oando.co.uk
8