New study shows that younger readers are more willing to pay for online content than older ones

July 1, 2013

New study shows that younger readers are more willing to pay for online content than older ones

by Sal Robinson

So this is an interesting turn of events: according to a new study from the Reuters Institute for the Study of Journalism, the younger readers they polled across nine countries were significantly more likely to have paid for digital news than older readers. The age group 25-34 is the most committed, but even 18-24 year olds paid for news at a higher rate than 45-54 year olds, for instance. Here’s the graph:

This upends an opinion that used to be fairly common, which was that the generation of readers  who grew up with free digital content, and who would be buying all the tablets and phones made for accessing such content as they came out, wouldn’t ever get used to paying for news. And therefore that the paying reader base for newspapers and other news sources was due to drop off precipitously like the Marianas Trench.

But it turns out that the water’s not that deep. And the healthy percentage of even the youngest readers paying for content suggests that the population of paying customers is likely to remain steady as the 18-24 year olds move up into their thirties and forties, New York Times subscriptions and news apps in tow.

Probably this result is connected to the widespread use of tablets and smartphones in these generations— the report also shows that readers who access news on these devices are significantly more likely to pay for content. The owners of Apple products are the biggest spenders of all: iPad users are 147% more likely to pay for content, and iPhone users 77%. In part, this must be because these products are purchased by users in higher income brackets, but the above percentages were obtained even while controlling for income and other variables, like education, age, and gender. It seems that the device-makers have effectively created gadgets that are good at extracting money from us.

Still, the numbers are not very high here: of the readers in the 25-34 age bracket, just over 20% paid for digital news, sliding down to under 10% for 55+ readers. Matthew Ingram over at Paid Content thinks the sense of the optimism the report may induce in media outlets is misguided, saying

Does this mean that media companies can rest easy, knowing that their paywalls and subscription plans are going to become a growing source of revenue? In a word, no…The Reuters data reinforces the idea — one we have argued for a number of times — that paywalls and subscription plans can be part of a digital revenue strategy, but they are not a blanket solution to the problems of the news industry. At best, they will likely appeal to one-tenth of a news outlet’s readers or viewers, and while that revenue is going to help bridge some of the gap created by the decline of print advertising, it isn’t going to fill that gap completely.

Perhaps most intriguing in the Reuters report is the country-by-country breakdown, which is worth spending some time with (the report can be downloaded here). In the cash-for-news stakes, Brazil comes out far ahead, with 24% of respondents reporting that they’d paid for digital news content, as opposed to 14% in Japan, 12% in the US, and a measly 9% in the UK. The other countries polled for the report are Germany, Spain, Italy, France, and Denmark, and their percentages range in between Brazil’s and the UK’s; Spain and Italy seem to be particularly robust.

The Brazilian population surveyed for the report is urban and doesn’t reflect the reading habits of the whole country— only about half of Brazil’s 190 million inhabitants have internet access. It also skewed younger than the respondents from other countries, whereas news consumption is, in general, still dominated by older readers. But a core minority of young readers paying for news in a big country is still cause for cheer.

And the way Brazilians are paying for news could make the picture even sweeter. Though in some countries, like Italy, the type of payment made for news is one-off fee for an app or an in-app purchase, Brazil shows a pretty balanced number of one-off payments versus subscriptions. All of which suggests that if you want to run a successful subscription news source in the next 10-20 years, it might be time to learn how to say “paywall” in Portuguese.