Free lunch for all? – A path analysis on free mentality, paying intent and media budget for digital journalism

Abstract

ABSTRACT The advertising-based business model of journalism is under massive economic pressure. Thus, paid online content is becoming increasingly important for publishers. However, most consumers refuse to pay for online content at all. “Free mentality,” the consumer’s aversion to accept any price point other than zero, is discussed as one major reason. This paper is the first to empirically examine whether free mentality is associated with a reluctance to pay for online news. For this purpose, data of a comprehensive user survey in Germany (n = 1,004) was analyzed via ordered probit models and path analysis. Additionally, moderating effects with regards to free mentality and perceived value were examined. Results confirm low paying intent in the public and the role of free mentality therein. Beyond, free mentality significantly moderates the effect of perceived value on paying intent. The ideal of the Internet as disseminator of free ideas has a strong indirect effect on paying intent. Additionally, mandatory public service media fees in Germany pose another possible context-dependent rationale. This implies that the audience tends to perceive generic online goods akin to public goods. Thus, publishers must focus on the paying minority and the creation of added value via sufficient differentiation.