Why A New (And Unusual) Pricing Strategy By A Rhode Island Paper Will Fail

13 Comments

Jim Brady was executive editor of washingtonpost.com from 2004 until earlier this year. Prior to that, he served in various executive roles at America Online. Brady began his career as a sportswriter at The Washington Post, and was a member of the launch team of washingtonpost.com. He is currently advising Guardian News & Media, the parent of ContentNext Media, on its U.S. online expansion.

The debate over charging for web content has been consuming the media industry in recent months, and there

13 Comments

stevebeste

Almost 2 years later, Newport Daily News, has the same subscription model, and the NYTimes announces its paywall pricing.

So much for experts like Jim Brady.

joni

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bob stepno

Sorry to join the conversation late… I've been intrigued by the Newport Daily News's project partly because I lived in Newport awhile, even tried to start a computer bulletin board there before the Web got rolling.

The Edward A Sherman Publishing Co's business model may be worth a more in-depth look to put its daily's pay-subscription idea in context.

The first thing I noticed was how much the NDN site still gives away, probably enough to sell site ads: While the "Local News" community pages are behind the pay firewall, you can still search classifieds, read local editorials, columns, obits, engagement and wedding announcements, take the local poll, and browse photos without logging in.

Meanwhile several other Sherman publications are online for free. See
http://newportdailynews.com/about/#History
http://www.newportri.com/Portal/

Among the free pubs is the company's alt-weekly tab, the Mercury, which could claim to be the nation's oldest newspaper, since it inherited the "Newport Mercury" name; founded 1758. http://newportmercury.com

Interestingly, the publications use Tecnavia, which recently announced support for Mobi-pocket & Kindle 2

Steve Rosenfeld

We should all applaud this newspaper company for showing the COURAGE (not desperation..) to try something that is different and unique.

Jeremy G. got it right. The folks in Newport are using a combo-pricing package strategy to bolster the print circulation to support print advertising rates which, for better or worse, is the way the bills get paid.

I am tired of the so-called "industry experts" continually droning on about the tough times of newspaper. Their continual "stating of the obvious" is mind-numbing at best.

I urge these people to use their "expertise" to come up with concrete ideas on how to improve our newspapers' lot, rather than continually piling on.

Well done Daily News! Well done.

Jeremy Geiger

Just trying to wrap my head around why a customer wouldn't just take the "both" option for cheaper and throw out the paper – and then the thought occurred to me that maybe this strategy is not aimed at consumers at all, but at advertisers.

Could it be that this pricing model is to incentivize advertisers to buy print or print/online ad packages because an online-only ad package is now effectively less desirable (since no consumer in their right mind will pay extra)? And then the paper could conceivably upsell design/layout services as ad package add-ons? In other words by reducing the value of the online-only ad package they are effectively increasing the benefit of purchasing a print ad?

Truly grasping at straws, but there has got to be a rational explanation for why a consumer would ever pay $100 extra to _not_ have to discard a printed paper.

TMDeditor

As the editor of a "fake" (satirical) newspaper that is grappling with the same issues (print vs web, who will pay what for which), I found this article extremely interesting and the arguments very well articulated.

In our case, we fear that if we shut down our print publication, we won't be able to entertain people in cafes, on public transportation, in waiting rooms, etc., or have a real, physical presence at such things as literary fairs. It's hard to exhibit a web site at a book or magazine fair, but it's neither practical nor green to continue to print.

Eddie Sutton

Excellent article and well articulated view – nicely done. Two thoughts from reading your article:

1) You mention the lack of an alternative revenue model. You don't need one. The current method of online advertising is sound (banner ads, tower ads, check out IAB for details). The flaw is how those ads are priced and marketed. The online publishing industry needs to embrace the enhanced value that online ads provide advertisers (click-through; quick updates; audience tracking, even localization) over the old-fashioned print ads. Online advertising is worth MORE than print advertising. Embrace that truth, sell it to advertisers, and increase your rates. THEN you make some money and continue to thrive.

2) In your thoughts about today's young readers, you suggest they are "pro-web". I would argue they are more pro-convenience and pro-immediacy. Their world has always become more convenient over time. They simply discover the convenience tools that work and embrace them. I learned about this article through a Twitter notice on my cell phone. Quick and convenient.

Great thoughts in your article and a discussion that deserves more time.

Tim Barkow

I'm going to start by agreeing wholeheartedly that this move smacks of insanity, but strangely, when broken apart, there's shards of sanity here. It still doesn't add up, but since no one in newspaper land is hoisting a golden victory chalice, it's difficult to completely condemn the move.

First, they are protecting their revenue-producing product. Every other paper slaps Google ads all over their online content at pitiful CPMs. Until someone takes the time to admit that newspapers have completely screwed themselves by outsourcing their ad tech, AND build a better replacement product, there's little potential for hope.

Second, by not being online, is the company somehow falling behind? First, people seem to forget that the purpose of a company is to make money. If the company isn't in the online media spotlight, but it's profitable, isn't that OK?

I'd argue that there's little evidence in Web history that they are damning themselves to irrelevance. New companies are always bursting on the scene and eclipsing once dominant properties.

With the cost of developing new web properties in continual decline, but no stable revenue model in place yet, the company could easily wait things out for a year or two, and then buy itself a stable of young, healthy local media properties built with better technologies at cheaper prices.

With a revenue plan in place, it would be able to profit from the growth of its new properties from day one, vs. the losses from "investing in the future" that everyone is sucking up today.

Now will the company do this? Probably not, since you'd need to be heavily mindful of the Web and the emerging technology landscape — i.e., an avid PaidContent reader — to be able to make these decisions.

But I'm sure management thinks they're smarter than the average bear.

joelogon

Ariely's Predictably Irrational uses the example of The Economist pricing its print and print+Web subscription the same, which positions print+Web as a better deal (Web is cheapest of all, as in your examples).

This isn't just irrational, it's perverse.

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