China and India lead surge in demand for news subscriptions

Linda J. Dodson

TOKYO — Growing numbers of consumers are seeking access to online news and entertainment, but with less than half willing to pay that could create information gaps along income lines, the World Economic Forum has warned.

“Low-income groups are less likely to pay for news services, suggesting that the rise of paid-for media may lead to information inequalities,” said the Geneva-based organisation in a report on media subscription trends during the coronavirus pandemic published earlier this month.

Asia Pacific newspapers have not been spared from the global economic contraction due to the pandemic.

Nikkei Asian Review reported earlier this month that Rupert Murdoch’s News Corp. suspended print production for 60 community newspapers across Australia due to a decline in advertising revenue.

Government lockdowns and travel restrictions have led other news companies in countries including India, Vietnam and the Philippines to halt printing presses and suspend deliveries.

“The industry needs financial models that enable them to fulfil their social functions while still supporting widespread access to critical content,” said Kirstine Stewart, a former media executive who now leads the World Economic Forum’s media efforts.

The postponement of the 2020 Tokyo Olympics has also dealt a second unexpected blow to media companies, in addition to the indefinite postponement of many sports tournaments.

Such events are not easily replaceable in a broadcaster’s programming schedule, especially as billions in advertising space have already been sold.

NBC, the U.S. Olympic broadcaster, has placed over $1.25 billion in games-related advertising. Media revenues may also take a further hit as advertising clients tighten their belts.

But the shelter-at-home policies being adopted worldwide during the coronavirus crisis have also sparked a surge in consumption for news, gaming, streaming, and social media.

About 80-90% of media consumers surveyed by the World Economic Forum in six countries now spend nearly a day each week consuming news and entertainment.

The survey of over 9,000 people in China, Germany, India, South Korea, U.K. and the U.S found that while 44% pay for entertainment, only 16% pay for news.

In Germany, the U.K. and the U.S., people aged 16-34 are twice as likely to pay for news as people aged over 55.

Low subscription rates have also made U.S. news companies prone to advertising cuts, according to the Columbia Journalism Review. Gannett, the country’s biggest newspaper chain, announced furloughs and pay cuts at the end of March.

In Asia, however, China and India lead the surge in demand for new information, with 25% of Chinese consumers now paying for news, the WEF said.

And while most survery respondents in the other five countries are willing to pay for only 1-2 media services, Indian consumers said they would pay for up to four news services and up to three entertainment services.

While the WEF survey did not include Japan, the latest annual report on information media trends by Japanese advertising giant Dentsu found that Japanese newspapers still derive most of their revenue from newspaper sales rather than advertising.

The country’s two largest daily newspapers, the Yomiuri Shimbun and Asahi Shimbun, lead the world in daily circulation at 8.3 million and 5.7 million copies, respectively.

According to the Dentsu report, the business model of Japanese newspaper companies has contributed to their resilience, compared to the constant mergers, ownership changes, and layoffs faced by their Western counterparts.

Unlike Gannett and News Corp., shares in Japanese news companies are not publicly traded, and transfers of shares are limited by law.

The Japanese government’s public broadcaster, NHK, is similarly funded by consumer license fees rather than advertising.

Around one-third of consumers surveyed by the WEF said they expect governments to fund access to news, but that may be easier said than done for Asian countries where disinformation has been used as a political tool.

Efforts to communicate effectively about the coronavirus by governments in Vietnam and the Philippines have been hampered by fake news available for free on Facebook.

The WEF report also pointed to some hope that the coronavirus will provide a boon to the news industry, revealing “the indispensable role that media play in society.”

Aside from the promising subscription rates in China and India, “globally, the proportion of people willing to pay in the future is 53% for news and 70% for entertainment.”

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