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Last modified: Wednesday, October 31, 2012

Research reveals consumers will accept Internet paywalls if media explain the need

Oct. 31, 2012

BLOOMINGTON, Ind. -- The pay-for-access policies adopted by The New York Times and many other media outlets will succeed only if consumers believe they're justified by financial necessity, according to a new report from two social scientists.

Their research shows The New York Times lost readers by failing to fully explain the need for what's known as a paywall. Times readers must pay between $15 and $35 per month for Internet content that previously was free.

Shahzeen Attari

Shahzeen Attari

Print-Quality Photo

An article about the research by authors Jonathan Cook of Columbia University and Shahzeen Attari of Indiana University appears in the November edition of the peer-reviewed journal Cyberpsychology, Behavior and Social Networking.

The New York Times introduced the paywall in March 2011, with what Cook and Attari describe as "little overall justification." Times editors said the change would strengthen the company's "journalistic mission" and allow "digital innovations."

In what is believed to be the first study of its type, Cook and Attari surveyed 954 New York Times readers before the introduction of the paywall and 400 after it was in put in place. In the online survey, they suggested a justification the Times hadn't voiced.

"When participants were provided with a compelling justification for the paywall -- that The New York Times was likely to go bankrupt without it -- their support and willingness to pay increased," Cook and Attari concluded.

Times readers who thought the paywall was merely an effort to improve the newspaper's bottom line, on the other hand, visited the website less frequently and looked for loopholes to avoid the charges.

"Our findings highlight how Internet users adapt to paying for goods and services that were previously free," Cook and Attari wrote. "This type of change exemplifies the modern Internet, where businesses initially eager to create a Web presence now struggle to generate revenue. As other content providers follow the lead of The New York Times, they may benefit from providing compelling justifications that convince consumers of financial necessity."

While The New York Times' paywall may have gotten off to a halting start, it is now regarded as a qualified success within the industry. The newspaper reports about 500,000 paid digital subscribers and has taken a series of steps to close the loopholes that allowed unlimited free access to articles. The Chicago Tribune, The Indianapolis Star and dozens of smaller newspapers either have paywalls or are considering implementing them, according to Media Life Magazine. Those publishers would benefit from The New York Times' mistake by more thoroughly justifying the new charges, Cook and Attari suggested.

Those publishers should also consider this cautionary note: a majority of The New York Times readers surveyed by Cook and Attari said they wouldn't pay for content and made good on their threat, often by switching to free providers. "The decline reported in our study is echoed in the decrease of over 3.3 million unique website visitors reported in The New York Times marketing materials between the spring of 2011 and 2012," Cook and Attari wrote.

Fearing a similar decline in website traffic, other major media outlets including The Washington Post and the television news networks insist they will continue to offer Internet content for free.

Cook is associate research scientist in the Department of Psychology at Columbia University. Attari is assistant professor in the School of Public and Environmental Affairs at Indiana University Bloomington.

Cyberpsychology, Behavior and Social Networking is published monthly online by Mary Ann Liebert Inc. The article is available for free online.