Don't Buy the Myth That People Won't Pay for News

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A major "State of the News Media" report is out today from the Pew Research Center's Project for Excellence in Journalism. I'll be writing up this report throughout the day, but first I wanted to correct a common misconception that is getting new attention from this survey: "nobody will pay for online news."

First, it's strange that Americans think they don't pay for online news. We do. We pay through our Internet bill. About two-thirds of Americans have Internet at home, and we pay an average of $41 dollars a month according to a February 2010 FCC survey. The reason we pay $500 a year for Internet access from our couch is partly to check email and chat with friends and partly to read all those "free" Websites that "nobody will pay for." We buy cable and Internet access, as opposed to particular pieces of content like ABC or NYTimes.com, but we're still paying for news, and want to.

Second, some Americans do pay for particular pieces of content. The Wall Street Journal website still tries to hide its premium content behind a pay wall (although you can bypass the wall by entering the article headline in your search box). The Financial Times has a metered system that blocks non-paying readers after a handful of online articles. Those newspapers are comparatively thriving in the beleaguered newspaper industry, and the New York Times hopes to follow the paywall brick road to revenue city when it switches to a soft meter in 2011.

Third, let's consider the assumption that today's "free readers" will never pay for news. In January, a Harris poll reached the similarly despondent conclusion that "most won't pay to read newspapers online." That sounds damning. But the actual numbers weren't so bad. As my colleague Dan Indiviglio pointed out, 43% of those surveyed read the newspaper regularly, and 23% said they were willing to pay a fee to continue reading. That means even before the dawning of the Age of the Paywall, more than 50% of regular newspaper readers said they would pay for online news. As for the other 60% of respondents: who cares? They're hardly reading newspapers online anyway. Media publishers wringing their hands over their reluctance to contribute to a paywall is like a politicians despairing that unregistered voters don't like them.

I'll dig deeper into this report later today, but I wanted my opening salvo to get out fresh and early. You can't say Americans will never pay for news when they're already paying $500 a year for the freedom to access it. You can't say paywalls will never work when some of them already are working. And you can't base major business decisions on hypothetical polling information that you're possibly misinterpreting, anyway.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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