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User Attitudes towards Online News: An Inferior Good?

Hong Kong.
The final presenter at The Internet Turning 40 today is Iris Chyi, whose focus is on users' emotional attachment to online news. In the US, newspapers currently appear to be in crisis: print circulation is declining, and online usage has not translated into significant revenue. Paid content is positioned as a potential solution, but may remain an impossible dream - and that debate, too, has gone on for a decade already.

Media usage does not always correspond to the attitudinal factors that drive the media selection process - online news users' response to online news is not necessarily enthusiastic, and may be an inferior good. In the past, media choices were made between scarce goods, and the only alternative to using specific media was not to use the media at all; today, choice has increased, and media use follows a preceding process of media selection - and that process is driven by user perceptions of the various media options available to them. Attitudinal factor deserve more attention, then.

It appears that various online media (newspapers, video news bulletins) are seen by their users as less likeable and less enjoyable than other media forms; if true, this means that online news are inferior goods. (And Iris explains the concept of inferior goods: when income increases, the demand for inferior goods decreases - other things being equal.)

So, Iris's study examined the emotional attachment of users to online and traditional news media, using Pew Center research data from a telephone survey of some 3,600 people in the US. In this group, TV was seen as more important than newspapers, and both as more important than online news; additionally, females and older users were more strongly attached to TV and newspapers than online news. This means that online news is an inferior good - it is the Ramen noodles of news, Iris says.

This may be explained by the unpleasant experience of online reading, the poor design of news sites, or the free nature of online news (meaning it is seen as less valuable or enjoyable), for example. However, this is not necessarily a value judgment - inferior goods are also perceived as convenient and useful - but it does mean that hoping to extract significant revenue from online news may be a pipe dream (or that the public perception of the quality of online news must be changed before attempting to do so).

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