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Re-Confirmed Again! Majority of Internet Users Not Willing to Pay for Online Services

This past October, Newsday, the Long Island daily newspaper, was purchased for $650 million, and its Web site, newsday.com, was put behind a pay wall. For just $5 a week, users could gain access to the site, but after three months on the market, how many had subscribed? Thirty-five people.

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This past October, Newsday, the Long Island daily newspaper, was purchased for $650 million, and its Web site, newsday.com, was put behind a pay wall. For just $5 a week, users could gain access to the site, but after three months on the market, how many had subscribed? Thirty-five people.

Clearly, Internet users so far have not been too keen on dropping dough online–and that’s exactly what a new report by USC’s Center for the Digital Future found. The school’s annual study on the impact of the Internet on Americans concluded that most respondents held a “strong negative reaction to paying for online services.” “Internet users can obtain content in three ways: they can steal it, or pay for it, or accept advertising on the Web pages they view,” said Jeffrey Cole, director of the center at USC’s Annenberg School for Communication & Journalism.

For example, even though the study found that close to 49% of respondents used free micro-blogging platforms such as Twitter, that doesn’t mean any ever plan to spend money on the services. When asked if they’d ever pay for Twitter, 100% said no.

Of course, Twitter isn’t as content-rich as most news sites (though co-founder Biz Stone believes it a good source of news), yet even strong content-providers haven’t been able to bring in paying customers online. Just last week, for instance, it was revealed that Rupert Murdoch’s London Times had gained just 15,000 paid subscribers after putting up its new pay wall. What’s more, the wall cut Web traffic by two-thirds, with some estimating it could plummet as much as 90%.

USC’s report also showed that while nearly 50% of Internet users never click on Internet ads (with 70% finding them annoying), only 55% would prefer Web advertising to paid content, surprisingly. “Consumers really want free content without advertising, but ultimately they understand that content has to be paid for–one way or another,” explained Cole.

The report concluded that increased use of e-readers and handheld devices offered hope for newspapers. “After years of aborted attempts, these advances finally appear to be practical and affordable methods of providing electronic news content to readers,” Cole said. That’s some good news for newspapers, especially for the New York Times as it gears up for its own pay wall.

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But obviously, the report didn’t offer good news for Twitter’s financial viability. After all, would you ever pay to send 140 characters?

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About the author

Austin Carr writes about design and technology for Fast Company magazine.

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