Will Consumers Pay for Content Online?
Will consumers pay for online news and entertainment they now get for free? That's the question Nielsen asked more than 27,000 consumers across 52 countries. As expected, the vast majority (85 percent) of people prefer that free content remain free.
But Nielsen concluded opportunity exists for online content providers, especially with content that consumers have paid for in the past.
The report shows people are most likely to pay for content they normally pay for offline, like theatrical movies, music, games and current television shows. Slick, professionally produced content may also be worth the price of admission. Many people have paid for this type of content in the past and recognize its value.
Consumers are far less likely to pay for homegrown content, whether that's a YouTube video , a Facebook update or a blog post. This type of content is viewed as cheap to produce and has always been free.
Newspapers, magazines, Internet-only news sources, radio news, and talk shows could also have a tough time persuading people to pay for their products online because much of their information is readily available elsewhere for free, Nielsen concluded.
Younger users more willing to pay
The study showed younger users are far more likely than their older counterparts to pay for digital content, even if they are less able to afford it. Nielsen suggests those under 20, though they are more familiar with getting around paid content , also understand the risks of peer-to-peer content sources, which can include prosecution or unknowingly downloading a virus.
Furthermore, younger viewers do not discriminate between screens – that is, a movie streamed through an on-demand service such as Netflix and viewed on a computer screen is just as valuable to them as one that is distributed through a cable company and viewed on their television.
But young or old, when it comes to the news, only one-third of respondents said they would pay for online newspaper content, citing their ability to get similar information from a number of online sources.
This may signal bad news for the New York Times, which recently announced plans to start charging readers for access to online content next year. Both France's national newspaper Le Figaro and Great Britain's Times of London have begun experimenting with a pay for content model.
Magazines fared slightly better: 39 percent of respondents said they would pay for digital versions of magazines.
The report suggests consumers will drive a hard bargain if and when they are asked to pay for content.
People will not pay twice
More than three out of every four survey participants (78 percent) said that if they already subscribed to an offline newspaper, magazine, radio or television service, they should be able to use its online content for free.
More than two thirds of participants (62 percent) believed that once they purchased content, it should be theirs to copy or share with whomever they want. With the current state of digital rights management, this is certainly not the case. Removing the encryption, or digital rights management (DRM), code from music or movie files is a federal offense in the U.S.
Nearly three-fourths (71 percent) of global consumers say online content of any kind will have to be considerably better than what is currently free before they will pay for it.
Nearly eight out of every ten (79 percent) would no longer use a web site that charges them if they can find the same information at no cost.
An alternative to the direct pay-for-service model is advertising, a model familiar to all consumers. And in recent years, consumers have been trained to accept a hybrid model, combining both a subscription fee with advertising. Once ad free, cable channels now carry ads the same as network channels.
The Nielsen survey suggests this hybrid model will be less successful online: Less than half of the respondents said they were willing to accept more advertising to subsidize free content. And 64 percent said that if they have to pay for content online, there should be no ads.