Tuesday, January 26, 2010

Tweaking subscription prices

Tweaking for the right price for an online subscription is a lot harder than I thought.

Rupert Murdoch with his wife, Wendi Deng.

After visiting a few sites that carry a plethora of ideas, I recommend you listen to this fantastic onpoint radio discussion with Jeff Jarvis, Michael Wolff and Steve Brill —with comments from Rupert Murdoch and Eric Schmidt. Undoubtedly, radio adds a fabulous human dimension to the issues in focus.

The other sites worth visiting are NiemanJournalismLab, Reuters, Journalism Online and News Innovation.

To add insult to injury, Seth Godin states that it's time we let go, get over the idea, relinquish the opportunity to make money...

In his own words:
So, if the radio is already there, and music is free-er than ever, it's not clear that music is valueless. There's more music being listened to (not just played, but being listened to) than ever before in history, and that listening is proof that people value it. At least they value it enough to spend their time.

Get over the idea that your success is equated with selling the right to listen, or selling control over when people listen. Relinquish the opportunity to make money by controlling who can listen and when. That's gone. It's over. It would be like a bakery selling the right to sniff the fresh bread or a wine maker selling the right to look at the cool label. It's now a public good, something you see as you walk by.

What you can sell, what you better be able to sell, is intimacy. It's interactions in public. Souvenirs. Limited things of value. Experiences. Memories. People will pay for those things, IF: your art is actually great and if you make it possible for them to buy them.

If it's great, let it go. You'll do fine. If it's not great, figure out what great is and do that.

I think I have a feeling of what Seth wants to achieve, but, on the other hand, I know he feels it's not for everyone...

—Any way you look at it, somebody has to pay for content.

A recent survey from The Boston Consulting Group shows that 48% of US consumers are willing to pay an average of $3 —current subscribers, a couple of dollars more— for a monthly newspaper online subscription. Which follows my hunch that a few readers are willing to chip in a tiny amount to alleviate their guilty feelings —they're getting a free ri-eade.

In my last post, I mentioned that "full" articles need to be protected. If not, they will be viralized to eternity, spreading and thinning advertising through all sites —copycats or not.

Giving away front pages and widgets with titles and a couple of lines would be a good way of viralizing these teasers, for a successful marketing ploy.

Copyrighting content and its enforcement is paramount. In association, Murdoch's leadership is needed to make all news providers pull together to offer these abridged editions. It makes perfect sense to follow this lead —they're all suffering, including CNN and FOX news.

Which should dramatically reduce the size or number of online news providers, diminishing the offer of ad space,  —and, increasing CPM, CPC and... print ad revenue.

Compared to the The NY Times proposition, I'd stay away from offering free articles to avoid opening the copyright Pandora box. Instead, I'd shoot for a larger audience, tweaking the $3 or less average pricing that readers are willing to pay,  —definitely a lot less than the NY Times $15 monthly subscription, which would likely reduce its readership to a measly 2%.

The math goes something like this:   144 = 48 x $3 is a lot better than  30 = 2 x $15.

And, of course, with more readers, 48% versus 2%, advertising revenue is significantly better, too.

Bottom line: Newspapers must lead readers to recognize that quality journalism depends on this contribution.

Do you see any alternatives?

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