Consumers with an iPhone show more willingness to pay for digital content than the wider online population, according to new research published today, although the chances of getting people to pay for newspaper on the web are slim.
The research, by the media law firm Olswang, adds weight to the growing sense within the media industry that the explosion in popularity of downloadable applications for the Apple device has created a new way of monetising digital content. Crucially, it may represent a more lucrative proposition than the current reliance on online advertising.
The survey shows a marked difference in the willingness to pay for content between people who own an iPhone and the general online audience. The law firm surveyed just over 1,000 adults and over 500 13-to-17-year-olds about their digital habits. John Enser, partner in its media, communications and technology team, said the team were surprised at the difference in attitude between iPhone and non-iPhone users.
"Clearly there is some skew in the figures, as iPhone users do tend to be more affluent, but not enough to explain the very significant differences in the responses," he said. "It seems to be that people get used to paying for content, such as an application on the iPhone because it is so easy and the idea of paying for something suddenly becomes much less of a barrier than it is online where people are used to getting so much for free."
Consumers are most likely to pay for film and television content, according to Olswang's Media Convergence Survey 2009. The survey showed that 58% of people would pay to access online a film just released in cinemas, 52% would pay for access to a film that will not be on DVD for at least two months and 40% would pay to access a film which is already on DVD or pay-TV. Looking at solely iPhone users, however, those figures jump to 73%, 67% and 54% respectively.
Consumers also reported a willingness to pay for some services which are currently free, with 30% of the online population saying they would pay for seven-day catch-up TV - 41% of iPhone users said they were willing to make a micropayment or set up a subscription to pay for catch-up TV.
News content, however, remains a tough online sell. The survey asked how willing consumers would be to buy a newspaper article or column which could be read on a computer or portable device such as a phone or e-reader. Only 19% of respondents expressed any willingness to pay - though that did increase to 30% among iPhone users.
That presents something of a problem for Rupert Murdoch, whose News Corp empire is planning to pour more of its newspaper content behind a paywall in the coming months.
"Murdoch really does face an uphill struggle," said Enser.
A possible alternative is to make a truly compelling mobile phone application, which consumers are more likely to pay for. Several media outlets - including the Spectator, the Wall Street Journal, the Financial Times and Radio Times - are already charging for their content through mobile applications.
"If you look at the Financial Times and the way it gives subscribers access to content through the iPhone and the BlackBerry, that model is a much easier play than trying to persuade people to pay for content on the open internet," Enser said. The FT's iPhone application allows readers to access a small number of articles per month for free, but to get complete access requires a full subscription.
The survey also looked at people's willingness to pay for fiction, travel guides and magazines online or on a portable device or e-reader. The survey found that 30% of people (42% of iPhone users) would pay for an online book; 32% (43% of iPhone users) would pay for an extract from a travel guide; and 29% (38%) would pay for a magazine.
The Olswang research comes as another survey released today shows the growing popularity of Twitter on mobile phones, and the increasing importance of the micro-blogging site as a way of bringing content to people's attention through the use of shortened web addresses.
Because of Twitter's 140-character limit, sites such as bit.ly and tinyurl.com are used to shorten often very long web addresses in tweets.
Research by internet mobility firm Novarra shows that mobile page views of those two address-shortening services have grown by 1068% so far this year.
At the start of the year neither bit.ly nor tinyurl.com were even in the top 1,000 sites accessed by mobile phone users, but tenfold growth in their usage has seen them race up the rankings. In the UK, Novarra reckons tinyurl.com ranked among the top 200 sites accessed last month.
"The growth in mobile traffic to sites that shorten URLs demonstrates that Twitter is a great viral tool for exposing consumers to new and interesting content," said its vice president of marketing, Randy Cavaiani.
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