May 17, 2024 Dataset Restricted Access

Monetary and Non-Monetary Payment Forms in The News Industry

Clement, Michel; Eggers, Felix; Koch, Elena; Füchtenbusch, Petra

The news industry faces challenges in selling content online because there is substantial competition from free competitors. Our research aims to determine whether users who consume free content can be transformed into paying customers with a news bundling service that provides articles across different newspapers. We address this issue empirically with three studies that examine monetary and non-monetary payment forms. The first study uses an incentive-aligned conjoint experiment (n=1,923) to examine five (monetary) price models: (1) pay-per-article, (2) flatrate, (3) base fee plus pay-per-article, (4) price ceiling, and (5) limited flatrates. We find that flatrates are among the most popular price models and suggest high revenues for the bundling service. However, these revenues are generated almost exclusively by the segment of consumers who are already paying for online content, thus cannibalizing existing revenues from the publishers. This finding holds across all price models that we studied. In study 2, we examine non-monetary payment forms, such as paying with data, attention, or effort, in two studies (n₁=125, n₂=737) to analyze if publishers can capture value from consumers who are reading news for free. We identify several options that generate value to publishers and that are not perceived as costly to consumers. The third study (n=1,902) builds on these findings showing how internal reference prices of monetary and non-monetary options are shaped by external reference price stimuli. We discuss and contrast the managerial implications of our findings to other media products, i.e., music, movies, and books.