Consumer attitudes toward digital newspaper subscriptions: factors affecting WTP

Размещено на http://www.allbest.ru/

FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

Bachelor's thesis

Consumer attitudes toward digital newspaper subscriptions: factors affecting wtp

Kovaleva Daria Andreevna

Saint Petersburg 2020



Abstract

The research focuses on the topic of consumers' willingness to pay for online newspapers and factors affecting it. The present paper aims to analyse the influence of demographic and personal factors on the motivations to pay for online news publications and studies the differences of WTP (willingness to pay) across different kinds of newspapers. The obtained results showed that the given factors have statistically significant impact on consumers' WTP. Higher levels of WTP were chosen for online newspapers that correspond to personal interests and professional field as well as for national and international kinds of editions. The research brings contribution to the online news industry and provides better understanding of consumers' preferences and attitudes towards online newspapers.

Keywords: willingness to pay, paywalls, consumer attitudes, online newspapers, online news consumption, paying for online news



Table of contents

Introduction

1. Theoretical foundation

1.1 The impact of digitalization on the media industry. Transformations in the news market

1.2 Emergence of paywalls in online news content. Types of paywalls

1.3 WTP and factors affecting it. Shifts in online news consumption behaviour

1.4 WTP and consumer attitudes in different types of online newspapers

2. Statement of the research question

3. Methodology

3.1 The definition of concepts and measurement levels

3.2 Sample

3.3 Data collection and processing tools

3.4 Analysis

3.5 Limitations

4. Results

4.1 Descriptive analysis

4.2 Correlation analysis

4.3 Regression analysis

4.4 Chi-Square analysis

4.5 Discussion

Conclusion

References

Appendix



Introduction

Over the past decade, digitalization has altered conventional news media. Decline in the advertising revenues and print circulation encouraged news companies to reconsider their business and revenue strategies (Fletcher & Nielsen, 2017). Moreover, shifts in media consumption habits and open access to the content which is free of charge on the Internet encourage news organizations to integrate traditional and new business models and redesign pricing models. (Chung et al., n.d.). Phenomenon of «culture of free» has the main influence on the consumers' attitudes towards paying for online journalistic content. People used to consume online news on the news websites and social media at no charge. Subsequently, media organizations face the challenge that encourage new providers to study media consumers' motivations and intentions as well as their needs and preferences towards content that they are ready to consume for a fee. Companies should consider different segments of audience and adjust pricing models and types of content for each one. What types of paywall should be introduced, whether it is worth putting certain content behind a paywall or not, and whether readers are going to pay for such content -- these are the issues that affect newspapers and other news providers while creating business and revenue models (Himma-Kadakas & Kхuts, 2015). The changes in the media environment described above raise discussions regarding a topic of consumers' WTP (willingness to pay) for online news and factors affecting it in the online news providers and media scholars' communities. Therefore, this topic is of essential relevance since the number of people who have subscriptions for online editions has been steadily growing and understanding of audiences' needs is currently of particular interest to the news media (Feldman, 2019).

The topic of WTP is studied in previous research regarding media consumption in different media sectors (TV, music industry, etc.) but mostly prior studies focus on the news industry in general neglecting online newspapers or magazines. Emerging new media and wide online access can make factors that affect traditional media differ from digital media. Online access expands the offered content (including constantly updating global news which can be accessed online) and gives new opportunities for communication between readers (forums, community activities, social networks). For example, the factors analysed in the prior research are mostly connected to the features of print media, such as physical quality, place and vendor loyalty (Saavedra & Gonzбlez, 2015). This research tends to study the digital newspapers market and the issues concerning consumers' behaviour and attitudes and types of paywalls in this market. Moreover, researches in this field of study mostly analyse print subscriptions and factors that motivate people to buy newspapers as well as how the motivations of paying for a print copy correlate to the intention to pay for online news content. WTP for online news is studied in the context of local news companies of particular regions but still little known about online newspapers of different sizes and types in different countries. It is still required to study how differences in content of newspapers and consumers' attitudes to the type of content can influence motivations to pay. For that reason, this research addresses the gaps of prior studies and examines how different factors affect consumers' WTP for digital subscriptions of different types of newspapers. This study focuses on the statistical analysis that gives the knowledge about the relationship between consumers' WTP and different factors affecting their choice to pay for online subscriptions of various kinds of newspapers.

The research focuses on the problem of ambiguity of factors that influence readers' willingness to pay for online content provided by newspapers. The research aim is to analyse the influence of demographic and personal factors on consumers' WTP for digital newspapers subscriptions and their relationship and study the difference of WTP across different types of online newspapers on the example of the US market. In order to achieve the research aim the following objectives are required:

To examine prior studies and identify gaps and issues in online newspapers industry regarding consumers' behavior and their willingness to pay for online subscriptions.

To set up research questions and hypotheses based on the theoretical foundation.

To collect the data of responses of Americans in the form of questionnaire and conduct the analysis.

To obtain and interpret results, make conclusions and define the implications of the research.

The results obtained in the present research could be relevant to several target groups. Firstly, the findings would be relevant to managers of newspapers that have or consider implementing a paywall on their websites. It is important to clarify that the research analyses the developed market economy. Accordingly, the results of the research would be mostly useful primarily for the US newspapers and also those ones that operate in the developed markets with the developed media systems because the audience' WTP in different countries with different media systems can vary significantly and this issue still needs more further analysis (Courtois et al., 2015). Thus, it is recommended to apply the results of the study to the audiences from the developed countries. However, the research gives the scope of application for understanding consumers' WTP for online subscriptions of newspapers and news providers and the analysis trends would give valuable information for predicting and examining audiences' preferences and needs for the whole market of newspapers. Since there is steady growth of individuals who are willing to pay for journalistic content including online newspapers content (Himma-Kadakas & Kхuts, 2015), the results of the research could be relevant to the media managers of companies that produce news and other kinds of content. This study could be useful for the future of news industry and its business models based on the changing consumers' behavior, attitudes and characteristics that are examined in the present research. In third place, the results of the research could be of an interest to the scholars who study media markets, news industry and managerial and technological issues in this field of study. The research gives the foundation for further study of consumers' WTP in the online news market because of the several limitations that do not allow to give the full picture on this topic. Thus, the research results have both practical and theoretical implications.

The research structure proceeds as follows. Theoretical foundation section reviews theory and prior studies on the topic of consumer' WTP in the online news market, changes occurred in the market due to digitalization and consumers' attitudes to online subscriptions on newspapers. Then, in the section devoted to Statement of the research questions based on the analysis of prior studies the gaps and the extent to which the present topic is analysed previously are identified and accordingly, the hypotheses of the research are developed and specified, the research question is determined, the objectives and methods are justified. The next section which is referred to the methods used in the research describes the main stages and components of the analysis, how the data is collected and analysed, the process of applying qualitative and quantitative methods in the form of a survey and statistical analysis. Description of the results section examines and interpret the findings, explains the relationship between different factors of WTP. Finally, in the Conclusion section the main conclusions are summed up and the implications are proposed.

The methods used in the present research are a survey and a statistical analysis in SPSS (Statistical Package for the Social Sciences). The data is examined with the logistic regression analysis, Chi-Square analysis and correlation analysis in order to determine to what extent consumers' WTP depends in various factors such as demographic and personal factors. The data is based on the responses of Americans and gathered through an online questionnaire.

To sum up, the research brings contribution to the online news industry so that newspaper companies and content providers for one thing could better understand consumers' preferences and needs and predict their behavior as well as could improve quality of content and adopt new pricing models. It also provides insights for further research in media economics, management and marketing fields and makes scientific significance for the topic of audience's WTP in the online news market.

1. Theoretical foundation

The transformations in the media business models caused by digitalization and the implementation of online paywalls by media enterprises raise issues concerning the topic of consumers' WTP for online information and in particular online news (Goyanes, 2015). Such changes in the media market and consumers attitudes towards paying for online news content are affected by economic, cultural and politic factors (Curtois et al., 2015). As people used to consume web content free of charge for many years, now the new challenge encourages news providers to analyse the aspect of consumers' motivations and intentions to pay for online news and redesign pay models and strategies under the new conditions. On the one hand, introduction of online subscriptions expanded readers base beyond traditional print news mainly due to the multiplatform, but on the other hand it caused serious challenges connected to displacement of revenue models and provision of online content (Carson, 2015).

Therefore, well-established audience' habit of «free culture» on the Internet currently makes it challengeable to encourage people to make payments for online content. It requires new approaches that can help change consumers' minds in terms of online news consumption, allow companies to better understand consumers' expectations and needs, analyse more deeply willingness to pay and various factors that influence it. Hence, identification of consumers preferences of different audience segments is of essential relevance when it comes to understanding whether the audience is ready to pay for online journalistic content (Himma-Kadakas & Kхuts, 2015).

1.1 The impact of digitalization on the media industry. Transformations in the news market

Media industry has been changed by various waves of digitalization. On the one hand, digitization has led to declining revenues in some types of media, particularly recorded music and print media industries, and made it challenging to generate the same levels of revenues. While on the other hand, the digital era brought great opportunities for companies to create online payment models and explore the depth of digital service expanding the availability and distribution of content (Bergstrцm et al., 2019). Whilst some industry participants -- recorded music and print media (newspapers and magazines) -- have being threatened the most in terms of decreasing revenues, other media industries continued to maintain nearly the same level of revenue and experienced reduction in the costs of production and distribution (Waldfogel, 2017).

Thus, media companies embrace new technology and redesign business models to respond to technological changes in the new circumstances. A changing media ecology influences audience media habits and expectations from the quality and availability of information. Such factors as the gradual development of mobile devices, wireless internet access and consequently changing consumer's media consumption habits play a significant role in the emergence of new opportunities that encourage media firms to go beyond traditional formats and pricing models (Peters et al., 2013). It should be mentioned that the development of social media and websites, where people can consume information for free, and shift to online media are among the main aspects of digitalization in the media industry (Himma-Kadakas & Kхuts, 2015).

Turning to the news market, the decline of both advertising revenues and print circulations lead to problems for news organisations. Moreover, market changes cause shifts in the economics of news that significantly influence quality and forms of news coverage (Fletcher & Nielsen, 2017). Since the Internet provides a large amount of free information, news media companies face new challenges and experiments over whether and how they should charge for the content (Chiou & Tucker, 2013).



1.2 Emergence of paywalls in online news content. Types of paywalls

A paywall is defined as a digital mechanism that restricts or prevents access to content via a paid subscription or a purchase (Chiou & Tucker, 2013). Companies that provide digital content for free depend on advertising revenues, while companies that have a paywall model (subscription-based model) rely on revenues generated by payments of subscribers, i.e. their main source of revenues is digital subscriptions (Punj, 2015).

A paywall model can be implemented as a content-based, micropayment, frequency-based and app-based. News organisations usually impose fees for their content using a content-based paywall by limiting certain kinds of information which are available only by subscriptions. A micropayment paywall is about requiring a small payment for articles that users read on the website. As for a frequency-based paywall, it refers to allowing to read some fixed number of articles (pages) over fixed amount of time but does not block free access to a certain «premium» type of information. The content is provided for free under an app-based paywall model but it requires payments if users want to get access to the content via smartphones (Chiou & Tucker, 2013).

In a broad sense, paywalls can be categorized in two types: soft and hard. Hard paywalls prevent free access to online content by requiring a payment while soft paywalls allow limited viewing and some of the content to be read for free. The latter helps to maintain the constant flow of Internet traffic and is crucial for media analytics to assess the audience in order to attract advertisers and also to engage more readers to pay for online content after a free offer (Giomelakis et al., 2019). Soft models fall into two categories: metered and freemium (also called noble or leaky). A metered paywall provides free access to a fixed number of articles before requiring to pay for other content. Whilst a freemium model is about providing news at no charge but keeping some premium content (that have premium value) for a fee. The results of the previous analysis of different types of paywalls of various newspapers showed that metered paywalls are preferred over hard paywalls. It can be caused by that hard paywalls can lower digital traffic unless a newspaper focuses on specific topics that are of interest to a narrow and loyal audience (Carson, 2015).

Media organisations operate on a two-sided platform by bringing together advertisers and consumers (e.g. regular readers, viewers) (Sung & Kim, 2020). With the introduction of paywalls by newspapers there have been several debates in terms of these two sides of the network. The supporters of this model state that consumers are ready to pay for the quality content to be entertained and informed. However, the opponents -- some advertisers -- argued against paywalls claiming that free content allows to generate more page views and traffic for advertising (Chiou & Tucker, 2013). But in terms of customers' expectations of added value, if people pay for the news content they perceive it as more valuable and appreciate what is being offered. In this case users read news more thoroughly and diligently. Hence, for advertisers that would mean that their products are also more valuable for audiences and that could have a positive effect (Li, 2015).

The New York Times was one of the first newspapers that offered its online content for free but thereafter the newspaper put some of its content behind a paywall on its website back in March 2011. The main issue for The New York Times was attracting and retaining readers who are loyal to the newspaper brand and are going to pay for access (Rothmann & Koch, 2014). To encourage readers to be charged for the content which they were trained to get for free is a major shift in consumer' psychology (Himma-Kadakas & Kхuts, 2015).

The implementation of paywalls can make newspaper companies to face tough competition in which even well-established and traditional newspapers will lose to news aggregators that gather news from the variety of sources and then allocate it on their websites available for everyone (Kim et al., 2020). Thus, one of the key threats for newspapers is losing some part of digital traffic i.e. audience that can seek and consume news on different sources in the Internet. This issue can make newspapers to return back to free online content model (Chiou & Tucker, 2013).

1.3 WTP and factors affecting it. Shifts in online news consumption behaviour

WTP is referred to a maximum price at which a customer would still be willing to pay for a certain product or a service. That means how much a customer values a certain product or a service (Goyanes, 2015). Studying people's motivations to pay for online news Fletcher & Nielsen (2017) refer to the term of reference price. The researches define this term as the standard with which observed prices are compared. People usually consider costs of comparable products or services facing a choice. Furthermore, the point is that consumers always keep in mind past prices and make choices based on past experience that forms a reference price for them. That price can be equal to zero, less or more than zero. All these findings demonstrate big challenges of the new realities for online news business. For example, if people are used to consume news for free and are provided with the abundance of free content, e.g. their past experience is based on free news consumption which they find reliable, trustworthy and beneficial, online news providers face a major problem over how to persuade people to pay for news afterwards.

One of the reasons why it is quite problematic and challengeable to encourage people to pay for online news content is the dominance of «culture of free» on the Internet where people got used to consume almost any type of content at no charge (Macnamara, 2010). The availability of free-of-charge news throughout the Internet have been changing audience attitude to the information consumption and particularly news and that challenges media organisations to encourage large numbers of readers to pay for their content. Media companies encounter changing behaviour patterns of audience who do not see the reason to pay for online content if most of the information is available for free (Berger et al., 2015).

Social networks have an influence on the distribution of free content to greater extent, particularly by providing corresponding messages. For example, «It's free and always will be free» are the words on a lending page of Facebook (Fletcher & Nielsen, 2017). As consumers used to get the information for free via social networks, it is quite difficult to introduce new pricing models and demand payment for the content (Tana et al., 2020). But according to recent studies, one of the factors that affects the intention to pay for online content is regular use of social networks, including Facebook and Twitter (Goyanes & Vara-Miguel, 2017). Studying the influence of social networks on digital news consumption, Goyanes (2015) deduces that individuals who actively use Twitter are more likely to pay for online news than those ones who have never used Twitter, although the difference between these two categories of users were not significant regarding their readiness to pay. The development of smartphones and 3G networks as well as social networks and likes play an important role in rise of news media consumption via mobile devices and change audience's attitudes toward paying for digital news (Struckmann & Karnowski, 2016).

However, online news content which is offered for free sometimes can be perceived as a lower value product and as a product of a lower quality that in turn can decrease audiences' interest in the consumption of that kind of news content. But that does not mean that news companies have to charge a payment for all the content that they provide, however, that emphasizes the importance of increasing the quality of the monetized content according to the readers' interests, needs and preferences. Paid content should differ from free content in terms of target audience' expectations and encourage people to pay for it (Himma-Kadakas & Kхuts, 2015).

After the implementation of paywalls on news websites the overall readership among young audience (18-24) sharply decreased as well as among those who have lower income (Chiou & Tucker, 2013). Despite this, younger audiences are more committed to the digital environment and spend time in the Internet more frequently that as a result increases chances of consuming online content provided by news companies and might lead to the higher propensity to pay for online subscriptions (Olsen, 2020). This fact questions the knowledge of age factors in terms of age's impact on willingness to pay for online newspapers. As for gender factors, women are more likely to participate in communication activities on news websites and also they perceive the information as the important social aspect of everyday life. It might increase women group's willingness to pay for online news content in comparison to men group (Punj, 2015). Moreover, previous research on WTP for digital news among Hong Kong citizens reveals that more than a half of those people who pay for online news content have higher educational level and one third is over 55 years old (Chyi et al., 2010).

Interest in media content often depends on personal connection to the topic and attitude toward it (Saavedra & Gonzбlez, 2015). Consumers' preferences and needs vary across different audience groups and it is difficult for media managers to provide such content that would satisfy every group's needs (Himma-Kadakas & Kхuts, 2015).

Consumption behaviour peculiarities and preferences in the online news market can be identified by different metrics. Clicks and comments in response to the content are helpful tools to show what people are interested more. These users' responses and reactions have an impact on digital advertising revenue of a news company. Advertising revenue is one of the main traditional sources for news publishers (Evens, 2010). As it was already mentioned in another section, with the implementation of paywalls advertising revenues can fall down since Internet traffic decreases. In the research of Chung et al. (n.d.) authors note that pageviews gradually fall with the adoption of online subscriptions. Since conventional revenue started decreasing news firms decided to use different click-related techniques in order to attract and encourage news consumers. For example, news companies usually use headlines with the most frequently searched words on the Internet related to the news topic, or they try to make a headline title more clickable. Even news abusity provoke people to click and comment articles and other news content. Such methods allow news companies not only attract and retain online readers but also better understand and monitor consumers' preferences and attitudes towards news content as well as adjust new techniques and strategies to changing consumption behaviour in online news environment (Kwak et al., 2020).

News companies that are stick to advertising-based revenue model explain it by the following -- the point is that providing content for free attracts more users and expands the user base which in tern increases clicks on an online advertisement. It is important to provide such content that is interesting and useful to the segments of audience valued by advertisers. However, studies show that the majority of people try to ignore advertising that decline advertising revenues. As for subscriptions-based model, it gives rise to other problems related to people' willingness to pay for paid content which in tern influences revenues that depend on subscriptions. Thus, media companies have to determine the audience characteristics (specifically demographic characteristics) of those who are more likely to consume free content while being interested in an online advertising and those who are more likely to pay for online subscriptions. This is the main aim for online content providers nowadays (Punj, 2015).

The rate of paying for online news media varies across different countries, however only a minority of people are having paid online subscriptions for any types of news providers' content. That is why it is still not clear if pay models ever work and what strategies work more effectively. Based on the prior research, the minority of people of each country which was studied (United Kingdom, France, Spain, Germany, United States and Japan) are paying for the news at the moment or are willing to pay for it in the future. The highest rates are in the United States, Spain and Japan. But overall, the number of people who pay for online news is significantly less than those who do not have paid subscription. Moreover, this small percentage is approximately the same across six countries (around 8-11% of the total number of respondents). Similarly, these three leading countries have the highest rates of the number of people who are very likely or somewhat likely to pay for online news in the future compared with other countries (Fletcher & Nielsen, 2017).

It is crucial for organisations, including media companies, to know their target audience well. Companies focus on those customers that are more likely to pay for offered products and services, although some of them are more sensitive to price changes. Therefore, finding appropriate ways to encourage target audience to pay and understanding customers' motives affecting willingness to pay are of a great interest to the media firms nowadays and a major key to the success (Salonen et al., 2020).

The changes in media consumption habits are not necessarily caused by technological and economic factors but also individual preferences. The factors that affect the decision to pay at a particular price for online content are still not fully clear. Thus, the influence of different factors, considering also personal needs and preferences, on willingness to pay for online news need to be studied (Himma-Kadakas & Kхuts, 2015).

1.4 WTP and consumer attitudes in different types of online newspapers

Newspaper business is considered as the biggest one in terms of employment of journalists and investments in providing news. For many years, online newspapers used to provide news for free with the support of advertising revenues. In the mid-1990s, when newspapers started moving online, they noticed that the majority of people is not ready to pay for online news but found that the number of people willing to consume free online news is gradually growing (Fletcher & Nielsen, 2017).

Print newspaper market decline happened in 2007-2009 period during the Global Financial Crisis. Newspapers' revenues fell down significantly in the United States and in Europe. In addition to these regions, other countries affected by global changes in this market as well, for example Australia. Speaking of Australia, its print market have been damaged particularly in 2012 when a lot of jobs have been cut. Influenced by several global changes traditional print newspapers implemented a digital paywall sales strategy that altered existing revenue streams and the circulation as well as consumer's attitude and behaviour in relation to willingness to pay for digital information. Thus, after the crisis, in the US market a quarter of daily newspapers introduced paywalls in order to get revenues from online subscriptions. US newspapers were one of the first who started actively use such a tool for monetization of online content on the websites that was available at no charge for many years. After USA, newspapers in other developed countries, of different types and different sizes, started implementing the same model (Carson, 2015).

The development of pay models in newspapers varies across different countries, mostly because of the differences in the media systems, industry structures, values and habits of people, but one thing remains the same for all kinds of media markets -- traditional sources of revenues tend to decline and will keep doing so that lead to new ways to develop innovative business models to operate in the digital environment (Fletcher & Nielsen, 2017).

Since the largest newspapers worldwide started to introduce a paywall model successfully, other newspaper firms reconsidered their strategies and decided to stick to a digital paywall strategy as well. Thus, in 2015 78% of print media firms had an online subscription model on their websites (Chung et al., n.d.).

Based on the results of the research of Himma-Kadakas & Kхuts (2015) the overall consumption of online newspapers is slowly growing. With the advent of opportunity for newspapers to distribute content on different platforms and as a consequence expand their presence on various media channels the number of readers has increased. But it is rather problematic to consider both online and print readers as the general indicator of readership since the value of these two types of consumers are not the same for newspapers companies.

According to the research by Goyanes (2015), consumers' attitudes to local and global information are different. The author notes that such elements as proximity, immediacy, contextualization, personalization, etc. influence people WTP for local information which creates a feeling of belonging to a geographic community. Local, national and global online newspapers quite often have different business models. Moreover, local newspapers struggle to compete with national and global newspapers and news delivery channels on the Internet and try to introduce new pricing models. According to previous studies, geography was one of the important effects on audiences' news interests (Saavedra & Gonzбlez, 2015). Such specialized newspapers as business, sports, science, fashion, economic, premium, etc., create a value for consumers and might positively affect WTP for digital news (Goyanes, 2015).

In the research of Himma-Kadakas & Kхuts (2015), authors define the difference between audience' engagement in everyday newspapers and financial topics newspapers. The audience of narrowly focused newspapers is niche audience that has its own motivations and interests. Thereby, some media directors state that niche audience needs to be proposed other pricing models, for example, a premium model when both online and offline (print) content requires a payment. But the question of willingness to pay for the newspaper content by people interested in some specialized topics still remains an important issue for media managers to develop the right payment model and innovative strategy aiming at niche audiences.

Overall, the consumption of online newspapers is slowly growing in many countries. Hence, understanding of factors affecting WTP for different kinds of online newspapers is all-important for media organisations (Newman & Levy, 2019). On the whole, there is lack of research devoted to digital newspapers subscriptions as most of the previous studies focus on print newspapers. Moreover, previous studies mainly focus on consumers' WTP for the whole market of news in general neglecting different sectors and types. A few prior studies mostly analysed the influence of demographic factors neglecting the importance of studying other motives.

Since 2011 global newspapers, including popular US newspapers, started implementing new pay models. Currently, news providers tend to identify whether different segments of audience are willing to pay for online content, what consumers' preferences and needs companies should consider when implementing or redesigning pay models for their audiences, and how to constantly motivate people to pay for digital journalistic content (Carson, 2015).

Based on the prior scholars' studies, it is clear that still little is known about factors which influence intentions to pay for online newspapers' content and which price is supposed to be reasonable to pay. Thus, this research aims to close these gaps and identify the extent of impact of different factors on WTP for digital subscriptions of different types of online newspapers.



2. Statement of the research question

Based on the analysis of the prior research, the most important theoretical issues were identified. The topic of consumers' willingness to pay for online newspaper subscriptions requires more study as the factors that influence audience's motivation to pay for online news are not yet clearly understood. The prior studies provided an ability to identify gaps related to the issue the thesis focuses on. Little known about online newspaper sector in terms of readers' attitudes towards the need to pay for online subscriptions. If previously the online versions of newspapers offered the content on the websites for free with the support of advertising revenue, nowadays many of online news publications introduce paid packages in order to increase their chances to survive in the market. After the decline of newspapers' revenues, it was necessary to implement online paywalls and as a consequence to find new ways how to encourage people to pay for digital news (Fletcher & Nielsen, 2017). Still there is little research on the topic of techniques allowing to increase consumers' willingness to buy a subscription for access to online content of newspapers. In addition, various kinds of newspapers by their type of content, coverage, characteristics of target audience, size and country need to be studied as well because the factors that affect the intention to pay for online news content can differ across different newspapers. Thus, the thesis aims to study the effects of different factors (both demographic and personal) on paying only for online versions of newspapers.

Proceeding from theoretical foundation, the research questions have been formulated as:

How do demographic and personal factors influence consumers' willingness to pay for online newspapers?

Does consumers' willingness to pay differ across different types of online newspapers?

Based on the prior research and research questions arising from it, the research objective is to get knowledge about the impact of demographics-related factors and personal attitudes on the willingness to pay (WTP) for online subscriptions offered by newspaper publications, and to analyse the difference of this indicator across various kinds of online newspapers.

In order to answer the research questions and achieve the research objective it is necessary to perform the following tasks: examine previous research on the topic the thesis gives attention to and identify the most relevant and important issues that need to be studied and gaps that require to be covered; to specify the hypotheses and research questions coming from the previous theory; to develop the methodology that includes methods that will allow to achieve the goal of the research, data sources, data collection tools and sample size; to collect the data, conduct the analysis and reveal the appropriate findings; finally, to sum up the obtained results and discuss the implications of the research.

The theoretical background provided insights that allow to develop and test the hypotheses. According to the previous research, it is claimed that various kinds of online newspapers (local, national and international) quite often differ by business models that might have effects on developing pricing models and marketing strategies in regard to audiences' preferences and needs, the ability to pay for subscriptions and subscription fees. Therefore, those differences might have an impact on the consumers' readiness to pay for online subscriptions (Goyanes, 2015). Moreover, the differences in the content offered by online newspaper publications can also influence consumers' WTP since, according to the study by Goyanes (2015), special interest newspapers create a value for audience which has its own interests and motivations towards journalistic content. This in turn can increase the level of consumers' WTP. In terms of readers' characteristics and attitudes, there are some finding on demographic and personal factors that can influence WTP for online newspapers' subscriptions. News companies strive to determine the right target audience that have more chances to buy online subscriptions, for that reason it is necessary to gain better understanding of demographic factors which can positively influence consumers' WTP. Thus, younger audience might be more likely to pay for online news due to different facts. One of them is that younger people consume digital content more frequently than older generation. After first implementations of paywalls on newspapers' online platforms, the number of people with lower income decreased. Hence, the income level is another important factor that can influence WTP in regard to online subscriptions (Chiou & Tucker, 2013). As a result, it is assumed that the level of education also has an effect on motivations to pay for online news. Moreover, women are more committed to consuming information of news websites and consider this as the substantial social aspect of their lives that in tern can influence women's WTP positively (Punj, 2015). Interest in newspaper content depends on personal connection to the topic and individual preferences, therefore interest in paying for that content can be also affected by corresponding to personal interests and expectations from the content and the positioning of the newspaper in general (Himma-Kadakas & Kхuts, 2015).

In consideration of above-mentioned issues from the previous research, the following hypotheses have been formulated:

H1a. In the comparison of people, those with higher income are more likely to pay for online newspapers than those with lower income.

H1b. In the comparison of people, those who are younger are more likely to pay for online newspapers than those who are older.

H1c. In the comparison of people, women are more likely to pay for online newspapers than men.

H1d. In the comparison of people, those with higher education level are more likely to pay for online newspapers than those with lower education level.

H2a. WTP is high for online newspapers that correspond to a person's interests and professional field.

H2b. WTP is high for online newspapers which brand a person considers as well-known.

H3a. WTP for national and international online newspapers is higher that WTP for local online newspapers.

H3b. WTP for special interest online newspapers is higher than WTP for general interest online newspapers.

In order to analyse the defined research questions the following methods will be used: data collection through the questionnaire and then conduction the statistical analysis in SPSS. These methods are sufficient to achieve the research goal since the responses of American audience are gathered via online survey on Google Forms platform and statistical analysis in SPSS provides all necessary tools to analyse the relationship between a dependent variable and multiple independent variables. The answers in a survey are offered in the form of the intervals, namely «less than $5», «$5-$10», «$11-$15», «more than $10». The answers show consumers' WTP that is the maximum amount of money that consumers are ready to pay for a product or a service. Logistic regression will allow to gain knowledge about the extent to which consumers' WTP is affected by demographic and personal factors as well as how different types of online newspapers influence consumers' WTP. The method of conducting a survey has been frequently used by authors of the previous research on the topic of WTP (Gao & Huang, 2019). Different types of regression analysis have been used in order to examine the influence of factors (income, audience satisfaction, paywall models, etc.) on consumers' WTP and make relevant predictions (Saavedra & Gonzбlez, 2015).

Overall, the theoretical foundation allowed to reveal the most important issues that need to be a subject for further research. The analysis of previous research gives an understanding of existing gaps on the topic of media consumers' WTP in terms of paying for digital subscriptions of newspapers. The research questions, the research objective and the relevant hypotheses have been determined. Moreover, the theoretical foundation made it possible to develop the research design and specify methods that will be used in order to answer the research questions. The discussion of methodology designed for the research is presented in the following section.



3. Methodology

In order to gain knowledge about the impact of such factors as demographic characteristics and personal preferences, attitudes and behaviour on the consumers' willingness to pay for online subscriptions of newspapers and analyse to what extent the willingness to pay differs across different kinds of online newspapers and stated groups of factors, the main steps within the scope of research design are developed. The methods, sample and data sources are identified in obedience to the previous research. The following stages in the sequence listed allow to achieve the research objective and analyse the research questions:

Based on the stated hypotheses, determine the key concepts and definitions that need to be clearly understood and identify relevant variables for the analysis;

Specify the relevant measurement scales and details used to analyse necessary variables;

Define the population size and sample size;

Identify the relevant data sources where the data will be gathered from;

Design a questionnaire taking into account variables needed to be used in the analysis and thereby that will allow to test stated hypotheses;

Collect the data via online questionnaire sent on the various platforms;

Conduct the relevant analyses;

Examine the relationship between variables and evaluate the influence of each factor on the WTP levels;

Interpret the obtained results applying the issues from theoretical foundation and considering research questions and research hypotheses stated in the thesis;

Given the results, define the limitations of the conducted analysis and make the conclusions;

Define the implications for further study of the issue and specify the contribution for different areas relevant to the research problem.

First of all, the hypotheses should be justified and hypothesized relationship between variables should be specified in order to proceed to the next stages of the section.

The first group of sub hypotheses refers to the first group of variables that were analysed -- demographic factors:

H1a. In the comparison of people, those with higher income are more likely to have a high WTP for online newspapers than those with lower income.

H1b. In the comparison of people, those who are younger are more likely to have a high WTP for online newspapers than those who are older.

H1c. In the comparison of people, women are more likely to have a high WTP for online newspapers than men.

H1d. In the comparison of people, those with higher level of educational qualification are more likely to have a high WTP for online newspapers than those with lower level of educational qualification.

Hence, the variables, each of which relates to the corresponding hypothesis, are as follows: monthly income group, gender, age group, educational level.

The next group of sub hypotheses corresponds to the personal factors and have the following variables: WTP in correspondence to interest/hobbies of a person, WTP in correspondence to professional field of a person, WTP for a newspaper which brand is considered as well-known worldwide for a person.

H2a. WTP is high for online newspapers that correspond to a person's interests or hobbies and professional field.

H2b. WTP is high for online newspapers which brand a person considers as well-known.

The third group of sub hypotheses relates to the group of different types of newspapers. The variables of this group are as follows: local, national, international, special interest, general interest newspapers.

H3a. WTP for national and international online newspapers is higher that WTP for local online newspapers.

H3b. WTP for special interest online newspapers is higher than WTP for general interest online newspapers.

The theoretical background made it possible to state the aforementioned hypotheses. The justification of hypotheses and sub hypotheses in terms of their links to the theory and findings of previous research have been given in the previous section Statement of the research question. The summary of all hypotheses with relevant variables are represented in Appendix 1.

3.1 The definition of concepts and measurement levels

The list of operational definitions of concepts estimated in the research involves: willingness to pay (WTP), demographic factors, personal factors, types of online newspapers. Demographic and personal factors are the groups of factors that consist of relevant aspects. Among the demographic factors measured in the research there are the following variables: gender, age, level of education, monthly income. Personal factors the research focus on are personal interests/hobbies, professional field and attitude towards the newspaper's brand. Moreover, it should be noted that different types of newspapers are considered in the analysis -- local, national, international, special interest and general interest newspapers. The aforementioned concepts are covered by the theoretical foundation section before. Based on the analysis of prior studies, it is necessary to specify the definitions and measurement level of each of the concepts.

The concept of willingness to pay (WTP) is studied in the previous research and refers to as a maximum amount of money that a consumer is ready to pay for a product or a service. It represents an ordinal scale as a level of measurement. The concept can show the level of value of a product or a service according to consumer's valuation (Goyanes, 2015). The measurement scale for the concept: 1 = less than $5 (low); 2 = $5 - $10 (medium); 3 = $11 - $15 (high); 4 = more than $15 (very high). Due to more convenience groups «high» and «very high» have been combined. By reason of further issues with analysing the given type of data using regression analysis, above-mentioned values have been treated as «having a high WTP» for high and very high levels and «not having a high WTP» for low and medium levels. Two proposed levels demonstrate the levels of value for consumers.

According to the previous research, WTP variable was analysed with various approaches: Logit models that allowed to identify price-related factors, Ordinal logistic regression and other regression analysis types, Factor analysis that made it possible to gain knowledge about customers' behaviour and purchase preferences (Saavedra & Gonzбlez, 2015; Chyi et al., 2010).

Personal factors used in the analysis are referred to chosen variables such as interests/hobbies, professional field and attitudes to the brand of the newspaper. Besides, customer behaviour elements were analysed in the previous research that included habits, purchase preferences, customer satisfaction. The researches note the significance of personal connection to the topic of online newspapers as the important component that has an impact on the consumers' WTP (Himma-Kadakas & Kхuts, 2015). Personal interests in the context of accordance to an online newspaper refer to a person's attention and concern which are engaged by a subject. Professional field means the field in which a person is professionally connected to and earns for a living working in this field (Hollanders & Vliegenthart, 2011). One of the elements developed in the WTP factor analysis by Saavedra & Gonzбlez (2015) was a level of loyalty that included attitudes to a brand. This concept concerns brand positioning that newspapers have been developing for the years and the analysis examines the influence of the brand positioning on consumers' motivation to pay for the online subscription of the brand. The scales for each of aforementioned factors are Likert scales that define the degree of WTP in correspondence to each variable. Moreover, the presence of an online subscription to any of the newspapers is measured in terms of influence on the level of WTP in accordance to each factor. Scale: 1 = Yes; 2 = No.

...