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There is no such thing as free news

Red newspaper vending machine

Consumption of digital news in Latin America grew exponentially during the Covid-19 pandemic. At least 13 percent of consumers interviewed by philanthropic organization Luminate in Argentina, Brazil, Colombia, and Mexico in mid-2020 said they paid for at least one news media subscription on a regular basis.

News of economic distress and paralysis caused by the health emergency have obscured a trend that had been gathering momentum in the background until the prolonged lockdowns triggered a deeper transformation. Yet the seeds had been sown much earlier, with Reforma, among the largest media groups in Mexico, setting up a paywall as early as 2003, becoming the first one in doing so in the region.

For all its efforts for a shift towards subscriptions as a primary source of funding, until early 2019 Reforma drew most of its income from ads in its print publications. Indeed, it had set up the hard paywall in no small part to protect the exclusivity of its print newspapers.

Two years ago, Reforma partially revised its subscription model, softening its restrictions for non-subscribers in an attempt to enlarge its readership as a potential pool of paying customers. Yet the subscription model is seen as irreversible.

Sooner or Later

A late comer to the subscription market, Argentina’s La Nación newspaper turned to subscriptions only in 2017. Unlike the print newspaper, which had a broader appeal, the digital market is seen as segmented, a challenge the company addresses with a focus on the quality of its content, on the one hand, and loyalty incentives that work in a similar manner to those offered by large retail chains.

A key driver for La Nación has been the realization that in the digital subscription market it has the ability to make its own rules, unlike the digital ads market that is now dominated by “others” (read Google and Facebook, mostly).

Yet what matters are the hard numbers. In a region like Latin America with 600 million people where smartphone use hovers around 70 percent and is expected to reach 80 percent by 2025 if not sooner, the potential for growth is huge. This is significant, for at least 87 percent of readers in Argentina and Mexico read the news on mobile devices, with the proportion rising to at least 90 percent for Brazil and Colombia.

Culture of Pay

Further helping this, the “culture of free” has been receding in the region, has said Jan Martínez Ahrens, head of the Americas division of Spain’s El País news media group.

And this is borne out by the numbers provided by Luminate, which conducted 8,570 interviews in June-July 2020 in Argentina, Brazil, Colombia, and Mexico:

  • Consumers are willing to pay for digital content, with 13 percent of respondents paying for at least one news subscription or service. These numbers may appear modest, yet they compare to 8 percent for the United Kingdom, 10 percent for Germany and 20 percent for the United States.
  • During the Covid pandemic, 57 percent of readers of digital media in Argentina, Brazil, Colombia, and Mexico increased their consumption of news.
  • 90% of consumers were accessing digital news at least twice a week, with 78% accessing at least once every day.
  • Digital news platforms now account for over half (57%) of all news content accessed, highlighting the increasing dominance of digital platforms as the primary sources of news and information.

We Subscribe

Two of the most important factors determining the choice of publication included for paying subscribers were:

  • High-quality content (for 36 percent of subscribers)
  • Credibility of the media organization as a source of serious and reliable information (34 percent)

Also gravitating in the decision of what to read was the independence of the news organization from any political party or powerful groups. This also applied to readers who were not paying subscribers.

Digital platforms now account for over half of all news content accessed, with 52 percent for Argentina; 59 for Brazil; 53 for Colombia, and 56 percent for Mexico.

Not Too Much Trouble Nor Too Little

Yet there are also barriers for subscription growth. Financial trouble is the main cause for cancellations: 54 percent in Brazil; 40 percent in Mexico; 39 percent in Argentina, and 37 percent in Colombia.

While there is little newspapers can do in that respect, the second cause listed in the Luminate report for subscription cancellation is boredom. In other words, paying readers who find the content they buy boring. That is the reason cited for subscription cancellation by 21 percent of readers in Brazil; 31 percent in Argentina; 34 percent in Mexico, and 37 percent in Colombia. And this brings back the issue of focus on the quality of information.

There are also other obstacles in the way of digitalization, including a high percentage of consumers who believe there is no need to buy information behind paywalls, which they are convinced can be found for free on other news sites or platforms.

Increase Your Rate

A number of steps can help news organizations accelerate the rate of subscriptions and digitalization:

  • A focus on the quality, with well curated content
  • Paying attention to the segmentation of the market
  • Ad-free news attract more readers and potential subscribers
  • Defending the editorial independence of the newspaper

Even if it may contradict what conventional wisdom would dictate, subscription-based media is becoming the norm. Those who refuse to see where things are headed will risk missing the train of history. Or if you’d rather offer your own news without a paywall, you can always use Verb’s subscription to publish newsroom-quality articles on your organization’s website.