Jeffrey I. Cole, the Annenberg School’s director of the Center for the Digital Future, explains,

“Consumers really want free content without advertising, but ultimately they understand that content has to be paid for one way or another.” However, Cole continues, “Such an extreme finding that produced a zero response underscores the difficulty of getting Internet users to pay for anything that they already receive for free.”

This is unsettling news for social app startups that rely on subscription fees to generate revenue.

Additionally, the study reveals, 70% of respondents feel online advertising is “annoying”. 50% never click on online ads. Yet, 55% would rather put up with display advertising than pay fees to access the content they want, minus the ads. Online news and paywalls requiring paid subscriptions to access premium news and articles are faring no better. Both Newsday and The Times have seen dramatic decreases in traffic after implementing the paid subscription models. When consumers can find the same news elsewhere for free, it’s tough to justify paying for the content.

So how does this explain the popularity of pay sites like Flickr and Vimeo?

These sites offer “split freemium” models, meaning fans can pay to gain access to premium features or gain greater on-site storage. These varying levels of site access weren’t free to begin with, so consumers don’t feel cheated when it comes to parting with their subscription fees.
Ecommerce sites are not affected by these findings. 65% of adult Americans have so far purchased, on average, 35 items online in 2010, from electronics and books to clothing and travel.

Would you pay to access Twitter or Facebook? Are you willing to pay for upgraded memberships on sites like Flickr or LinkedIn?