Pay for your device, connection AND content? Fairfax’s online paid content model is ‘trust vs money’

The ABC’s 7.30 Report screened a fascinating report on the viability of one Australia’s largest newspaper companies changing the size of its print edition from broadsheet to tabloid.

Alongside the change in the paper’s size is the impending addition of a ‘paid online content’ model to its digital edition.

While there have been thousands of arguments on the viability of paid models for online content, it struck me the one most consistently used by big media companies is based on brand trust – our readers will pay for our content because they trust what we produce.

But in 2013, where organisations providing ‘value content’ is spreading faster than ever before, is trust enough? Will consumer choose ‘trust’ over ‘money’?

In the past, a consumer understood that by buying a newspaper for $1.50 you were paying for the content, printing and logistics of the physical product getting to you.

What Fairfax seems to be forgetting is that consumers are now not just buying content online. They’re investing in the form (device), the logistics (internet connection) and then paying for content; the consumer now foots the bill for costs formerly absorbed by the newspaper.

Will consumers pay for digital content on top of the additional costs?
Will consumers pay for digital content on top of the additional costs?

If you are a consumer who’s just paid $700 for a new iPad and another $50 per month for an internet connection, why would you want to pay for online content too?

Let’s break those numbers down: a monthly subscription for The Age is $39.80 for both the printed version and “Full access to The Age Digital Edition” content (which you currently get for free).  That works out to be $477.60 per year (I’ve contacted The Age to see if it’s cheaper for just digital but yet to receive a response).

Add to this the cost of internet line rental (about $600 per year) and an average $700 for the device, you end up with over $1700 for the year. While you can argue that drops the next year because of the one-off cost of the device, there’s research that shows consumers are upgrading their devices at the end of their plan cycles (thanks to some slick manufacturer and telco marketing).

While brand trust counts for much when it comes to news content, when consumers are looking to cut something out of their budget a subscription to a digital newspaper looks less like an essential.

The introduction of quality, free content through avenues such as the Australian version of The Guardian will likely make the decision-making process a lot easier.

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