Posted on July 1, 2013 in Archive

The problem with digital newspaper business models

Newspapers still aren’t rethinking their the impact of digital distribution. So what is the problem with digital newspaper business models?

A recent study by Simon-Kucher and Partners in the US looked at the digital newspaper reading habits of 1,000 tablet owners.

One of the most prominent findings of the report was that tablet owners are frustrated by digital newspaper subscription costs and conditions.

The survey found that 72%  of respondents have downloaded at least one newspaper app but 80% said subscription fees are too high.

In the US, most newspapers have different requirements for signing up to their online services.

For example, the New York Times charges $15 per month, while the Financial Times charges upwards of $50 for full access.

Australian newspapers have also started charging readers for their digital services.

Recently News Limited unveiled its News+ and The Australian Digital Pass subscription services and other Australian news providers are beginning to follow suit.

While tablet owners are prepared to pay for digital news apps, they’re frustrated by the lack of consistent pricing and access across newspaper apps.

Image of digital newspaper business modles

Digital readers want access to news stories that interest them

Newspapers still don’t seem to understand that if people can’t get what they want from the paper, they’ll just find it elsewhere.

A whopping 80% of digital readers surveyed said they want newspapers to unbundle their content and just sell access to individual sections.

In this sense newspapers really aren’t thinking outside the box. Their current digital subscription models are the tablet equivalent of a paperboy.

They think anyone who subscribes to their online services wants exactly the same thing as the print option.

The thing is, digital subscribers don’t want that and even if they did – it’s impossible.

Digital newspapers will always be different to print newspapers, so news outlets should embrace the options and opportunities that brings.

Offering flexible subscriptions to certain sections, topics, or even individual reporters would be a nice start.

If people are forced to pay for entire sections they never read, they will track down the bounty of free online news sites instead.

My concern is that if newspapers need a study to tell them that…they’re in serious trouble.