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News organisations under pressure as users won’t pay for online news

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Researchers from Oxford University found that digital subscriptions and online advertising were failing to address the collapse in newspaper sales. Some 75 per cent of Britons said they would never consider paying for online news.

The Reuters Institute’s Digital News Report 2015 used a YouGov survey of over 20,000 online news consumers across the UK, US, Ireland, Germany, Italy, Spain, France, Denmark, Australia, Japan, Finland and Brazil.

Finding that print revenues were declining fast, while only a minority of online users were prepared to pay for news online, the report suggested news companies face another year of “intense pressure” and will have to be “more inventive than ever” with both editorial and business strategies in a bid for survival.

It suggested there was yet to be a discernible move towards an increase in paid online content, or in willingness to pay. Publishers are still finding it difficult to convert casual readers when free news is easily accessible elsewhere.

The report did note that while the majority of payment was small-scale and one-off in the UK four years ago, today almost three-quarters was for an ongoing subscription. This meant that average yearly spend had risen to around £10 a month.

Nearly half of those surveyed said they now accessed news on a smartphone, but many said they were loyal to one or two news sources on the device.

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Nic Newman, a research associate at the Reuters Institute said the smartphone was becoming “the defining device” for digital news with a disruptive impact on consumption, formats, and business models.

Average weekly usage of smartphones for news access has grown from 37 to 46 per cent across all of the countries surveyed, with two-thirds of smartphone owners using them for news every week.

The report indicated this had cultivated an environment dominated by a few successful brands, while others struggled to reach a wider audience – both via apps and browsers. The average across all countries was 1.52 per person – considerably fewer than on a tablet or computer.

Newman also said the data shows “a quickening of the pace towards social and mobile news, a decline in desktop internet, and significant growth in video news consumption online”.

The report pointed towards an “intensifying battle” developing for global audiences online – involving new players such as BuzzFeed and the Huffington Post, expanding newspapers such as the Guardian and New York Times and relative old-timers including the BBC and CNN.

BuzzFeed has doubled its reach in the US and UK over the past year, while securing a strong foothold in a number of countries among the younger demographics. The site has just announced Janine Gibson, former deputy editor at the Guardian, is taking up the role of editor-in-chief for its British operation – signalling where its ambitions lie. BuzzFeed said this would be the starting point of “significant investment” in the UK.

Gibson launched the Guardian’s US site and played a key part in the paper’s Edward Snowden NSA leaks story. She said the UK arm will aim to follow in the footsteps of the US operation and “build up a coherent breaking news operation”.

The Digital News Report also saw the role of advertising come under scrutiny – it noted significant consumer dissatisfaction with online ads. There has been “rapid take up” of ad blockers in a bid to combat what consumers see as excessive and ever-encroaching forms of advertising, as well as discontent regarding the “blurring lines” between editorial and advertising.

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The research suggested online advertising was “going through something of an existential criss” as revenue from display ads continued to fall and accidental clicks up (due to the move to mobile). Some 47 per cent of US respondents and 39 per cent of UK users said they used adblocking software to screen out advertising and a third just ignore ads.

The experimentation with native advertising or sponsored content has had varying degrees of success – with sites such as BuzzFeed and Vice at the forefront – though the report found at least a third of people felt deceived when they had read an article and then found out it was sponsored. The respondents suggested they weren’t totally against native advertising however – while half didn’t like it, they understood it was part of how they access free news. 

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