Would even a nominal content charge put people off?
Two pieces on the whole charging for content debate caught my eye, one from Nieman Journalism Lab comparing paying for iPhone applications to paying for articles, and another from journalism.co.uk talking about Rupert Murdoch’s decision to shut down the – free – evening paper The London Paper.
In Nieman Journalism Lab, Joshua Benton talks about an iPhone app – Write Room – and shows what happened when it varied its pricing from free, to $4.99, to 99 cents.
The result? The free app was downloaded 16,347 in three days. The $4.99 version got nine sales a day (just imagine how annoyed they would have been on finding out they could get it for free). Meanwhile, the 99 cents version got 72 sales in a day – an increase but still just 1.3% of those who were willing to use the product…so long as it didn’t cost them anything.
In other words, 98.7% said, ‘looks interesting I will give it a try’, but as soon as a small charge was put on it, the reaction was ‘no, on second thoughts I won’t bother.’ Perhaps a lesson for newspaper publishers?
In the comments to the article, various points are made, including one that says that free apps tend to attract casual browsers who will download a load of stuff because they can. Yet, as Pat McKenna of MojoWeb says in response to one of my recent posts, for most people anyway, news is a commodity.
Newspaper websites rely on these casual visitors a great deal – people who will want to read about a certain story but are fairly open about where they do so. BBC News Online will probably do the job for 90% of them just as well as The Times online. And more to the point, advertisers pay for those 90%.
Which brings me onto Jon Bernstein’s piece on journalism.co.uk, which goes over Rupert Murdoch’s recent decision to close The London Paper. Jon Bernstein talks about a rumour that Murdoch never really intended The London Paper to be free, mulling over a 10p ($0.17) price tag.
Though Murdoch seems to now have an allergic reaction to the ‘f’ word, Jon Bernstein shows that a nominal 10p charge would not have made much difference to its commercial success. The reason being that for a cover price to really be viable – in other words to really cover costs – it would have to be prohibitively high.
As Jeff Sonderman said earlier in the year, newspapers haven’t relied on their cover price to fund their papers since the 1830s:
“For about 180 years, the retail price of a newspaper has never reflected the total cost of assembling and producing it. Any paper that tried to charge such a price (6x more), would lose circulation and be undercut by correctly priced competing papers.”
So on that rationale says Jon Bernstein, “free is just another cover price.”
Image – Better Bethany
Related Posts
Tags
Share This
Thanks for the link Dirk, always on the lookout for these examples. As I'm sure you're aware, O'Reilly Media is also engaged in cross-selling, using their blogs as valuable-in-and-of-themselves adjuncts to paid events and publications.
I'd agree with you on the effectiveness of online content advertising. Search advertising, by counter, can be quite effective, at least in pulling people in. Where I often think search advertising models break down is in the conversion process once the visitor arrives at the merchant site.
Thanks for the comment Bud and I agree, advertising isn't infinite and its effectiveness online is open to question anyway.
One example of a newspaper though that has made a success of trying something else – cross selling other service onto readers – is the Daily Telegraph here in the UK:
http://bit.ly/fXyfg
Key here is that paid advertising inventory is not infinite. We can't expect that some third party will always be available to pay for something that gives us utility.
In other words, direct pay models are going to have to work in some cases in order for the operations to remain viable. Otherwise, the gig is up for those operations.