Most U.S. Millennials and Gen Z audiences are paying for news, but they are twice as likely to pay for or donate to e-mail newsletters, video blogs, or audio podcasts from independent creators than pay for newspapers in print or digital.
This is based on the latest data by the American Press Institute, broadly supported by surveys of Oxford’s Reuters Institute.
Reuters Institute’s 2023 survey across 46 markets found that, on average, 19% news consumers aged 18-24 and 25-34 paid for online news at least once in the past year.
This is actually a higher proportion than older generations — only 16% of 35- to 44-year-old consumers paid for online news, 14% of 45- to 54-year-olds, and 13% of those aged 55 and older.
In the United States, per the 2023 API survey, 51% of Gen Z (16- to 24-year-olds) pay for or donate to news, either online, or broadcast, or in print.
The number rises to 63% among younger Millennials (25- to 31-year-olds) and to 67% among older Millennials (32- to 40-year olds).
Problem definition: As the latest data shows, the challenge is not to get young readers to pay for any news, as they already do, but rather to get them to value traditional sources more, such as digital newspapers.
API found people younger than 40 are more than twice as likely to pay for or donate to e-mail newsletters, video, or audio content from independent creators (47%) than to print or digital newspapers (22%).
Reuters Institute saw an average age of a digital newspaper subscriber to be almost 50.
Media CEOs treat diversifying audiences as one of their firms’ strategic challenges and debated the best practices at the recent INMA World Congress of News Media in New York.
CEOs heard that traditional brands can learn from the independent creators about, for example:
Perceived higher authenticity of individual voices vs. institutional voices.
Rising preference for audiovisual formats vs. text.
Or flexible ways individuals support creators, through recurring or one-time payments vs. subscription-only.
How to respond to this strategic challenge?
Theory: Marketing theory and studies suggest publishers should consider the risks of moving into new products and into new markets, e.g., products tailored to the needs of Gen Z.
In brief, the further a firm moves away from the core, the higher the risk due to the uncertainties about the unfamiliar segments, and new resources and competencies required to serve them.
In his 1957 Harvard Business Review article Strategies for Diversification, Igor Ansoff introduced the idea that the riskiest growth strategy is diversification, which involves both targeting new markets with new products.
In his 2004 book Beyond the Core, Chris Zook suggested firms can minimise the risk by moving into adjacent areas, which are closely related to the core business.
In case of news and younger audiences, this less risky way would prioritise investment in, for example, the closest adjacent segment to the current subscriber base (the 40-49 age group) or the near-core segment (the 30-39 age group), rather than the far-core segments (those aged 29 and younger).
The near adjacencies are less risky because the needs of 30-49 age groups are likely similar to the current subscriber base, and the publisher’s content and formats require less adaptation.
These readers also likely are familiar with the brand, access news through established channels, react positively to similar advertising, and show a comparable willingness to pay.
These shared attributes help maintain manageable acquisition and retention costs.
Practice: The review of INMA case studies suggests news publishers usually target the far-core segments, taking on more risk and cost.
From January 2022 to June 2023, INMA published 59 articles featuring 56 unique examples of brands trying to understand, attract, engage, and monetise younger audiences.
We identified the articles based on keywords, and then we used a generative AI tool, OpenAI’s GPT-4 model, to extract the information on targeted segments. AI succeeded in 43 cases.
In 35 or 82% cases, brands targeted users aged 29 or younger.
Specifically, in 13 or 30% cases, they targeted users aged 19 or younger.
Only in eight or 18% cases, the target age group was 30-year-old or older.
Counterargument: Although marketing theory and studies imply moving far away from the core increases risk, they also suggest that with calculated risks, clear strategies, and leveraging existing strengths, companies can successfully diversify and expand.
For example, at the June 2023 INMA Subscription Growth Master Class, Swedish regional group NWT presented how it grew the volume of digital subscribers by 33%, while reducing the average age by 3.5 years in 2022.
It succeeded with a combination of tailored content, distribution, pricing and promotion, all managed by agile, cross-disciplinary teams.
Interested in learning more about Gen Z? Download the 2022 INMA report What Gen Z + Media Need From Each Other by Paula Felps.