A new study from Denmark dispels hopes around micropayments as an easy new revenue source for news publishers and suggests subscriptions remain core.

“Micropayments are hardly a silver bullet,” said professor Aske Kammer of Roskilde University at the 2023 INMA Subscription Growth Master Class.

His in-depth study of Danish audiences, carried together with Thomas Spejlborg Sejersen of Danish School of Media and Journalism, explored micropayments as a way to ease the funding crisis in journalism. It confirmed, though, limited demand among consumers and publishers. 

For decades, many in the media and tech have touted the pay-per-unit model as a solution to get masses to pay for online content, including news. 

• In 2023, Crunchbase listed 72 startups built upon the idea of micropayments, including Axate in the United Kingdom, Fewcents in Singapore, and LaterPay in Germany.

• This year alone founders of two new micropayments startups — from Switzerland and from the U.K. — pitched INMA and asked for feedback. 

• At the same, older startups like Blendle from the Netherlands ditched the idea after years of experiments due to low demand.

Across 46 countries surveyed by Oxford’s Reuters Institute in 2023, less than 3% consumers said they made a one-off payment to access a single article or edition in the past year. 

Out of sight, out of mind

Professor Kammer told INMA that people overall don’t have any opinion on payment models. And they like what they know — all-you-can-eat subscriptions for audio, video, and games.

Danes are not familiar with the concept of micropayments and actually found the term confusing during in-depth interviews and focus groups. Researchers got better responses talking about “single payments’ or “pay per item.”

Drilled for the potential upsides of micropayments, the interviewees talked about lower cost and possibilities for personalisation — reading premium articles from multiple sources.

Anyway, in a subsequent survey of 2,720 consumers, two-thirds preferred subscriptions for articles, and three-quarters for podcasts and videos. 

“Women, older, and educated audiences were most interested in micropayments, but overall, subscriptions remain the strongly preferred option for most,” said Professor Kammer.

At the same time, Danish media professionals expressed reluctance toward offering micropayments in interviews. They said subscriptions were more predictable for planning the finances and better for building audience relationships.

Netflix is the price reference

Interestingly, past experience with news subscriptions was linked to preferring micropayments over subscriptions. 

This may be due to the high prices of online news in Denmark. For example, the national newspaper Politiken charges 299 Danish kroner per month, or the equivalent of US$44, for digital-only access.

Many interviewees made comparisons to the price of Netflix, whose plans cost in Denmark from 79 to 149 kroner (US$11 to US$22) as their reference point. Median price the respondents said was “fair” for subscriptions: US$7-US10 per month for articles and US$7-US11 for podcasts or video. 

Past experience with gaming or streaming was linked to preferring subscriptions. This is perhaps because, across Internet and media sectors, subscriptions are common — they generate 81% of consumer revenue, per Activate, Single transactions rule only a few sectors, such as books and cinemas.

When asked about the “fair” price for micropayments, Danes said: US$1.5-US$2 per article and US$1.5-US$3 per podcast or video.

“A narrow appeal of micropayments and limited interest from publishers makes this a hard sell. Good old tried-and-tested subscriptions remain the preferred option, and publishers should focus on scaling them over experimenting with micropayments,” concluded Professor Kammer.

The growth challenge

The findings of the Danish study are broadly confirmed by the Reuters Institute’s surveys: 75% of those who paid for online news in the past year (15% across 46 markets) said they had access as part of a subscription or a membership.

How to grow the total paying audience beyond 15%? In practice, few readers internationally are exposed to any paid news, or offers, so growing awareness, differentiation, and engagement might be the priorities.

• In the richest 33 markets, casual readers enjoy free alternatives — from aggregators to broadcasters and social networks. My review in 2022 found paywalls on just 41% of the most popular sites.

• Even if people head to paid Web sites, most visit only once: In 2Q 2023, across 178 brands benchmarking with INMA, the median proportion of users who did only one session in a month was 71%.

• As a result, most consumers don’t see any paywall: In 2Q 2023, the median proportion of users stopped by a paywall at an INMA member Web site was 25%.

• INMA studies showed the fast growing ones had tighter paywalls but offered inexpensive and long trials to lower the barrier for casual readers to sample content and become subscribers.

Looking for more growth tactics? Read about how the top 50 news subscription brands grow. 

Greg’s Readers First newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. Subscribe here. 

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