The push for paywalls mischaracterizes the nature of online newspaper readership

[July 20, 2010]

As U.S. newspaper publishers increasingly talk of building paywalls around their online content to ward off free-riders cannibalizing their print product, new research suggests that such efforts may backfire because most local users of local newspaper sites already are paying customers—by paying for the print edition.

A study published in the latest issue of Journalism & Mass Communication Quarterly found that two-thirds of visitors to local newspaper websites are “hybrid” readers—that is, they regularly read the print edition (and most of them pay for it) as well as the online version—in contrast to the remaining one-third of “online-only” readers.

Across a range of measures, hybrid readers were found to be more active on the local newspaper site (i.e., using it to search for a variety of news and classified ads information) and also more satisfied with the site’s offerings. These findings run counter to conventional wisdom that most online readers are avoiding the paid print newspaper because they can get the same information online for free, said the team of researchers from the University of Texas at Austin, led by Dr. Iris Chyi, an assistant professor in the School of Journalism.

“Thus, an online subscription or micropayment model would entail asking many local users to pay twice—or, if print subscribers are granted free access, it would mean publishers are chasing a minority of online-only users in the local market,” the authors concluded. “Moreover, these online-only local users are less active and are not more satisfied with the local newspaper site, making a pay model all the more challenging. In essence, in their pursuit of monetizing online content, publishers may very well end up alienating local users (hybrid as well as online-only).” Long-distance users, on the other hand, constitute a different market segment, which is examined in a different study as part of the overall research project (to be published in the International Journal on Media Management).

These findings were based on an analysis of data originally gathered by a newspaper research firm that conducted online reader surveys on 28 local newspaper websites around the United States from October 2007 to June 2008. Responses from 18,484 survey respondents were analyzed in the study.

Chyi and her co-authors—Mengchieh Jacie Yang, Seth Lewis, and Nan Zheng (see http://www.newmediaresearch.org/merg/)—have conducted a number of studies using the media economics perspective to challenge misperceptions regarding the economic nature of online news. Chyi’s research can be found at http://www.newmediaresearch.org.

CONTACT: Dr. H. Iris Chyi, assistant professor in the School of Journalism at the University of Texas at Austin; chyi@mail.utexas.edu; http://www.newmediaresearch.org/

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