Will Users Pay for Online Content?

Earlier this week, The New York Times announced their plans for a new subscription model. As of March 28, 2011, users in the United States and abroad will need to pay a monthly subscription to access unlimited web-based and smartphone content. Users will be able to access 20 free articles, slideshows, or movies per month; after which, NYTimes.com will require users to register for a subscription. Users who access NYTimes.com articles through search, Facebook, and Twitter will be able to view content, regardless of whether they reach their monthly limits. The New York Times implemented these changes in Canada on March 18.

For the last several years, the journalism industry has been struggling to remain profitable, and paid subscription models provide a strategy to overcome financial challenges. Display advertising, while lucrative, does not necessarily generate profits, and the New York Times is setting a new precedent for the industry. Will other newspapers follow in the footsteps of NYTimes.com? In a space where free content is readily available, will users be open to paying for news?

A December Pew Internet and American Life Center study addresses this exact question. In a sample survey of 755 Internet users, researchers found that 65% of respondents paid for online content -- mostly software and music. The breakdown of the Pew Center's findings is as follows:

  • 33 percent have paid for digital music
  • 33 percent have paid for software
  • 21 percent have paid for apps for cell phones and tablets
  • 19 percent have paid for digital games
  • 18 percent have paid for digital newspaper, magazine, or journal articles or reports
  • 16 percent have paid for videos, movies, or television shows
  • 15 percent have paid for cell phone ringtones
  • 12 percent have paid for digital photographs
  • 11 percent have paid for members-only content on websites with premium subscriptions
  • 10 percent have paid for electronic books
  • 7 percent have paid for podcasts
  • 5 percents have paid for resources to use in video games or computer games
  • 5 percent have paid for video game cheats
  • 5 percents have paid for online dating websites
  • 2 percent have paid for adult content

Undoubtedly, NYTimes.com is major influencer in the online and social media space, attracting a wide demographic. Will their precedent be successful-- driving a new precedent in the field of journalism, or will users flock to sources of free content?

Also-- how will NYTimes be able to retain its college student audience? These individuals are active readers who may not necessarily have the funds to pay for a subscription. And what about high school students who may not have access to a credit card?

Who's going to be able and willing to pay for online content? Is this a responsible precedent for NYTimes to set? How do we reconcile the profitability of the journalism industry with free and open information?

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