To Charge? To Pay? It's a Muddle

So much is being written about the question of what consumers will pay for content online. The latest study by BCG says that US consumers on average will pay only $3/month, the lowest of any country surveyed. Newspaper companies and journalism organizations all over the country are stymied by the question, doing studies, crunching numbers, issuing pronouncements.

Well, from the consumer side it's just as schizophrenic. I'd hate to be called into a focus group on the subject. Let's see....

At our house we are avid Internet and TV news junkies, but we also subscribe (and pay) for a newspaper and 9 magazines (apart from business trade pubs). Let's break that out further: Last year at this time, we got one NYT and one WSJ delivered to the house. Then we decided, too much paper, too little time, let's streamline. We waffled about how we wanted to read the NYT, then realized that the key factor for us was behavioral: different formats were appropriate for reading in different venues. We decided to keep getting the 'paper on ink' version on the days we commute, and eliminate Satuday and Sunday, opting instead for the Times Reader on the weekend, an elegant download solution that's perfect for browsing with a cup of coffee on the kitchen counter. Times Reader comes free for paid home delivery subscribers, so that was easy.


Next, we discussed which paper we preferred for the morning commute: turns out that while we were each grabbing one paper for the train ride, we both really wanted the New York Times. On days when Mark was taking the Journal, he was buying a copy of the NYT on the newsstand at $2 per copy!That made no sense economically, if we both wanted the NY Times, we should get two copies at the home delivery price. So we let the WSJ lapse. I heard radio ads for half-price home delivery promotions, so I called the NYT 800 number, convinced them to cancel our account, re-start us as new subscribers, and give us the two-for-one 'introductory' deal. Mission accomplished, we now we get 2 New York Times home delivered weekdays for the price of one. The WSJ keeps sending cheaper and cheaper renewal offers (down to $10/month for home delivery AND the annual online subscription). Seems pathetic, it's worth more than that, but for now I'm not buying.

Now we get to the weeklies. Until a year ago we got both Time and Newsweek along with 4 other weeklies: New York Magazine, TheWeek (which only I read), The New Yorker (delivered to Mark's office to eliminate the paper pile-up at home), and TimeOutNY (delivered to our NYC apartment where it's most useful). New York has become a 'must have', I find no suitable substitute, so it's safe. But 52 copies of 6 magazines makes for 312 weekly magazines, too many dead trees for inside the house, especially if, like me, you have a hard time discarding. So we decided one newsweekly was enough; Newsweek announced a new strategy that seemed a good fit with our election-year media habits (issues-oriented, more thoughtful, less fluff, MSNBC-like) so we decided to stay on board and try it out. We get a good professional discount price, something less than $30/year, and it's worth it. Brownie points, too, for a publication that takes a stand and implements a new product and audience strategy! But six months in, we're wondering: the world's issues are daunting, we could use a LITTLE features fluff mixed in with the commentary, maybe we should resubscribe to Time again? So if we do, will we renew Newsweek? Jury's out, please don't send me a reader survey yet.

Then recently TheWeek came up for renewal and I was on the fence. The renewal offer by mail was buy two for $59. But no one else I knew wanted a copy (our 23-year-old daughter gets The Economist and Vanity Fair, she tried TheWeek but it didn't stick. Our younger daughter is still in college and only wants her People subscription). Instead I went online and the site was selling one year for $49, or $39 if you agree to auto-renew by credit card. I hate auto-renew, why commit now to next year's rate when they're so changeable, so I wasn't compelled. Then I clicked on an innocuous little link labeled 'to renew', and lo-and-behold, same annual subscription offered for $19. So I bought. (I told this story to a friend in the magazine publishing business who said I was taken; do a Google search for 'buy TheWeek', he said, and I'd have found it from a discount magazine agent for $4.99, which is what he paid). Oh well, I rationalized, a publisher deserves to make SOME profit.

Next on the radar: The New Yorker. Really, we'd be happier if it were a monthly.

What's the point of all this? I suppose my message is that the publishers' schizophrenia about pricing is mirrored in the consumer's indecision about the same. (And I haven't even addressed the role of the bloggers and online news aggregators!) It's a chicken and egg scenario, at least for the short term. We're confused about what we want and what it's worth; there's an explosion of news and information, much of it now offered free. Readers/subscribers/users - whatever we're being called - are like the patrons at an 'all you can eat' buffet, gorging on everything because we're not being forced to make trade-offs.

All the consultants in the world can do market research ad nauseam, but while we adjust, we're all going to use our own peculiar antennae to decide what to consume and what to pay for. Publishers need to get smarter about knowing their customers and serving them with the best content wrapped in the best user experience, and experimenting intelligently to find out where they fit in the new order. Eventually they'll compel us to make some hard decisions.