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In Canada, more people are paying for news online: Publishers with paywalls report growth in consumer revenue

It is said that in every crisis, there are opportunities

A new study suggests more Canadians are paying for news online. Some news outlets with paywalls or premium paid content are reporting growth in consumer revenue, while the decline of advertising has accelerated since the beginning of the coronavirus pandemic. Subscriptions and other forms of revenue will certainly not cover these losses, but they could continue to increase, as is happening in other countries.

According to the 2020 Digital News Report by the Reuters Institute for the Study of Journalism at the University of Oxford, 13 per cent of internet users in Canada accessed paid news content online in the past year. Since 2016, the number of Canadians willing to pay for online news has stagnated at about nine per cent.

Despite the increase in 2020, Canada is still below the average of 16 per cent of all 40 countries included in the study. Among Canadian respondents, men, young adults and people who identify as politically left wing are more likely to pay for news on the internet.

closer look at three countries shows different patterns in how this behaviour has evolved over the past few years.

Norwegians pay for news

In Norway, paying for news online is a well-established habit and is also growing faster. In the United States, the threat of “fake news” and the strength of a few major news sources have contributed to the growth of paid content. In the United Kingdom, however, very few people pay for online news, in part because there is abundant free content from newspapers and the BBC — a situation comparable to Canada.

Respondents in various countries were asked if they have paid for news content in the last year. (2020 Digital News Report/The Reuters Institute), CC BY

The survey was conducted in February, before most Western countries went into lockdowns as a way to control the spread of COVID-19. Since the beginning of the pandemic, concerns about online disinformation and trust in media have increased. Access to reliable, independent and locally produced news has become especially important during these times.

News of layoffs and closures at news organizations have raised awareness of the fragility of Canada’s media ecosystems. But will this lead to more growth in subscriptions and other forms of payment for online news?

Most subscribers choose one site

Economic uncertainty leads consumers to limit discretionary spending — and based on our 2019 study at Laval University, an online news subscription comes far behind Netflix or Spotify in the list of priorities. As well, according to the Digital News Report, people who pay for online news tend to choose a single brand or outlet. Very few have several active subscriptions.

But this may be starting to change. Digital-only media like The Logic in Toronto, which covers news of the innovation economy, and the Halifax Examiner benefited from an increase in consumer revenue since last March.

In Québec, Le Devoir recorded a surplus for the third consecutive year, with 60 per cent of revenues from subscriptions and sales. Support from the federal and Québec governments, including increased advertising during the pandemic, has also helped keep the newspaper afloat.

Using AI solutions

The Globe and Mail in particular has taken innovative steps to develop consumer revenue. Its data science team has for years been developing, in collaboration with university researchers, artificial intelligence solutions to optimize engagement on its digital platforms — notably by customizing free access to content, which appears to stimulate subscriptions more efficiently than simply blocking access (and displaying a subscription form) after viewing four or five stories.

It’s in the best interest of news outlets to offer a distinctive product, but also to build trust with their audiences if their aim is to increase consumer revenue through subscriptions or donations. This cannot be improvised in the context of a pandemic, but the value of journalistic work is heightened in the context of a crisis — even if most media have decided to provide COVID-19 content for free.

It is said that in every crisis, there are opportunities. Paid-content models are not a panacea and there is no single recipe for success. Many news outlets have chosen to leave their content fully free — the CBC, of course, and private broadcasters, but also several newspapers. However, if enough of them decide to charge for their content, many Canadians may follow.

Colette Brin
Professeure et directrice du Centre d’études sur les médias, Université Laval

This article is republished from The Conversation under a Creative Commons license.