NY Times Digital Pricing: It’s Strange
by havoc
As the Times rolls out its paywall, their message is that quality content should cost money. Their price segmentation undermines the message.
In theory, price segmentation can be arbitrary. In practice, consumers want it to be logical and feel that it’s fair.
- content + phone app = 15
- content + tablet app = 20
- content + both apps = 35
- content + dead trees = 30-ish
At $15 for phone and web, $20 for tablet and web, or $35 for all three, the Times has several problems.
The algebra doesn’t solve
The price structure can’t be rationalized. If the algebra doesn’t work, then it should be because of a “bulk discount” where buying more gets you a better deal.
Instead, buying more appears to charge you twice for the content. The most loyal customers are punished.
The prices imply that apps are worth more than content
If the Times wants to ask people to pay for quality content, charging $20/mo to add a second device but only $15/mo for all the content is nuts. Talk about undermining your own argument.
It doesn’t relate to costs at all
People resent paying to evade a restriction that’s unrelated to true cost structure. Failure to match costs with revenues can be a mess from a business perspective as well. Does the tablet and phone app division get credit for all the pricier subscribers? Can a competitor get an edge by pricing more sanely?
Limiting which devices can be used to read the paper is a daily annoyance for customers, but not one worth $180/year to solve.
It’s an opening for the competition.
The Times pricing may also evolve poorly as technology evolves. Tablets barely existed just a year ago!
Better approaches
Most of these ideas would be better:
- have a single price — KISS
- charge more for access to more sections
- charge one-time prices for apps in app stores
- don’t split tablets and phones; a single monthly charge for all non-web access, on top of the basic web subscription
- have an ad-free tier that costs more
- have a tier that ups your limit from 20 views but is not unlimited
- have a tier that bundles some kind of third-party content or other valuable offer
- put some content on a time lag unless you pay more
What the Times did instead is just… strange. It seems like one of the worst options to me.
It’s my opinion that news should not cost more than $5 per month, all-access, to any kind of app/device (except the paper edition which has a physical cost). I mean, when Netflix is able to stream movies that cost millions of dollars to create for $8, and music subscription is $5 (or $10 with mobile offline support), I think that digitally-delivered news shouldn’t cost more than $5 per month.
it’s even 195$ for the phone version, as the billing seems to be for 4 weeks.
Fortunately, the only people who care are those who still consider The New York Times relevant.
[…] Today, NY Times unveiled a new subscription and pricing model. A pretty convoluted one, too. Like Havoc wrote: […]
I blog-posted about it too. You gotta love the old businessmen in these company boards not getting it at all.
Just for the record, your price for the dead-tree is way off. At $2/day and $6/Sunday, that’s $72 for four weeks. But in that case, you’re obviously paying for the product and the delivery, so it makes a little more sense.
Apparently I was looking at a 50% off deal and didn’t notice. You can get 50% off at the moment fwiw, at least in my zip code.