Pricing of Digital Content
Clearly one of the biggest challenges Associations and publishers face with sharing content in digital forms is how to price it. There is some perception that information should be free but we see in the music industry a clear revenue model…it just changed to micro-transaction. 99 cents a song. But it’s working.
So, can this method, this new revenue model work for associations? Or maybe doesn’t have to mimic the music industry and instead sell subscription to larger collection of content. Or both?
The first challenge is breaking your content down into bite size chunks. Technology like XML offer great promise but do require new content management workflows and processes.
But before we invest do we see any signs that digital content can be sold. Can we go from giving it away to now charging? What is the impact on print sales? What about bundling? While all of these question remain we do see some evidence from the for-profit media world.
From the WIRED Blog Epicenter is the post The Newsonomics of Pricing 101 by Ken Doctor. Ken provides some interesting insights being seen in the media and I feel good learning for associations. Here is a summary but I would encourage you to read the full post.
We can pick out at least nine emerging data points:
- 33 to 45 percent of consumers who pay for digital subscriptions click to buy before they ever run into a paywall. That’s right — a third to a half of buyers just need to be told they will have to pay for continuing access, and they’re sold.
- If print readers are charged something extra for digital access, then non-print subscribers are more likely to buy a digital-only sub. Why pay for digital access if the other guys (the print subscribers) are getting it thrown in for “free”?
- You can reverse the river, or at least channel it. The New York Times took a year, but figured it out righter than anyone expected. It bundled its Sunday print paper (still an ad behemoth) with digital, making that package $60 or so a year cheaper than digital alone. The result, of course, is that Sunday Times home delivery is up for first time since 2006.
- New products create new markets. 70 percent of The Economist‘s digital subscribers are not former print subscribers, says Paul Rossi, managing director and executive vice president for the Americas.
- The all-access bundle must contain multiple consumer hooks. Sure, readers like to get mobile access as well as desktop and print, and maybe some video.
- While pageviews may drop 10 to 15 percent with a paywall, unique visitors remain fairly constant. We see the phenomenon of those who do hit a paywall one month coming back in subsequent months, rather than fleeing forever.
- Archives find new life. Archives have lived in a corner of news and magazine websites for a long time. They’ve been used, but not highly used or highly monetized. Now, courtesy of the tablet, and a new way to charge, The Economist is finding that 20 percent of its single copy sales are of past issues.
- News media is probably underpriced. Take the high-end Economist. CEO Andrew Rashbass — speaking to MediaGuardian’s Changing Media Summit 2012, in a recommended video — said that a survey of its subscribers showed that a majority didn’t know how much they were paying for the Economist. When pressed to guess, most over-estimated the price.
- Bundle or unbundle — what’s the right way? It depends.
I think these are encouraging signs of promise for Associations. It’s clear that with a decline membership and due that new revenue streams need to be found. While there may not be a gold “rush” there still may be some gold in your content.
What are you finding? Do you see “investing” in new publishing content solutions to be worth the investment?