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Paywalls the future say journalists and business leaders

20 Mar 2014  |  David Pidgeon 
Paywalls the future say journalists and business leaders

Over half (56%) of journalists, political insiders and business leaders believe that paywalls are the future of digital news, according to a YouGov study conducted on behalf of the London Press Club.

Of the 739 respondents, the research found that 42% think "soft" or "metered" paywalls are the most viable business strategy for newsbrands, with 14% thinking that full or "hard" paywalls make "most long-term commercial sense".

However, only one in three (34%) think that such strategies will be profitable enough to be commercially sustainable in a global market where digital news remains readily available and free. The study also revealed that 43% believe that paid-for models are not sustainable at all.

What many advertisers will be interested in, however, is the news that nearly half (49%) of the opinion formers surveyed believe that consumers who access news sites via paywalls are "more valuable" than ones who don't.

As a result, they think that media owners are justified in charging advertisers premium rates to access consumers in a paid-for environment. By comparison, more than a third (37%) do not believe they are.

Unsurprisingly, just 8% of UK consumers find paid-for options appealing.

Earlier this month, the chief executive of News UK, Mike Darcey, said if the serious news business wants to invest in a sustainable future, it must cease to give its content away online for free whilst charging ever increasing prices for print.

In a keynote speech at the Digital Media Strategies conference, Darcey, who is in charge of The Times, The Sunday Times and The Sun, criticised the Guardian for offering free access to its online platforms and therefore relying on advertising as the key revenue stream.

"Journalism can have an immensely bright future, with digital as our ally, not our enemy," Darcey said as he recounted that many people thought placing News UK titles behind paywalls would damage the business.

However, citing a report by Enders Analysis, Darcey said his approach is now regarded as a sensible and sustainable strategy and that other newsbrands were treading on thin ice with current business models.

Responding to the criticism, Andrew Miller, chief executive of the Guardian Media Group, the Guardian's owner, said Darcey's vision was out of touch with the spirit of "openness" that defined the digital age.

"Open isn't a luxury; it is not a nice thing we want to do, it is reality," he said. "Open is the way the web works, so we are working with the web."

Remaining open and free to engage with the likes of Facebook and Twitter is helping to deliver a growing reach for the newsbrand, Miller argued, and that in the long-term, this strategy can pay off.

Commenting on the YouGov results, Dan Brilot, consulting media director at YouGov, said: "Over the past couple of years different news outlets have tried different ways of making money from their digital operations. All we can say with any certainty at the moment is that the future of these models is unclear.

"The explosion in the consumption of digital news has led to the industry going through a period of large-scale disruption to its traditional business model.

"The vast majority of opinion formers expect to see further major changes to how news is consumed and sold in the next 20 years, a view shared by most UK consumers. It is clear that opinion leaders believe that paid-for environments represent the current best sustainable option, even if they are not entirely sure that will be good enough to succeed in the current market where quality, free digital news content remains widely available."

Click here for the full survey results.

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