New York Times Should Charge for News, Google Too: Janet Guyon - Bloomberg
If he had to choose a newspaper to run successfully, it would either be one with a rich audience -- such as that of the New York Times -- and unique content, or the hometown paper with compelling news and local ads. "The hopeless case to me is a newspaper filled with generic, widely available content," he said in an interview. Both models have something in common: they sell information that's not available elsewhere and that is targeted to a particular audience. While one source of revenue comes from advertising directed at this audience, there's no reason why content producers shouldn't charge consumers as well. That's called subscription. It's something publishers have been doing for decades. Louis Vuitton How much, where and when is determined by the competitive environment and how well a producer can distinguish his product in the mind of the consumer. That will be the challenge of the New York Times when it begins charging for online access next year. "The issue is not how much people value access to a particular newspaper, but whether comparable content is available elsewhere for a cheaper price," says Varian. Perhaps the most brilliant practitioner of getting people to overpay in a world of cheap knockoffs is Louis Vuitton, the luxury goods maker. Louis Vuitton never goes on sale and charges $1,000 and up for a printed, plastic-coated canvas handbag. Last year, the company recorded revenue growth of at least 10 percent. Parent LVMH Moet Hennessy Louis Vuitton SA earned almost 2 billion euros on 6.3 billion euros in revenue from fashion and leather goods purely via the allure that items sold in its shops were authentic artistic statements worth multiples more than very good copies found on the street corners of New York City.
If he had to choose a newspaper to run successfully, it would either be one with a rich audience -- such as that of the New York Times -- and unique content, or the hometown paper with compelling news and local ads. "The hopeless case to me is a newspaper filled with generic, widely available content," he said in an interview.
Both models have something in common: they sell information that's not available elsewhere and that is targeted to a particular audience. While one source of revenue comes from advertising directed at this audience, there's no reason why content producers shouldn't charge consumers as well. That's called subscription. It's something publishers have been doing for decades.
Louis Vuitton
How much, where and when is determined by the competitive environment and how well a producer can distinguish his product in the mind of the consumer. That will be the challenge of the New York Times when it begins charging for online access next year.
"The issue is not how much people value access to a particular newspaper, but whether comparable content is available elsewhere for a cheaper price," says Varian.
Perhaps the most brilliant practitioner of getting people to overpay in a world of cheap knockoffs is Louis Vuitton, the luxury goods maker.
Louis Vuitton never goes on sale and charges $1,000 and up for a printed, plastic-coated canvas handbag. Last year, the company recorded revenue growth of at least 10 percent. Parent LVMH Moet Hennessy Louis Vuitton SA earned almost 2 billion euros on 6.3 billion euros in revenue from fashion and leather goods purely via the allure that items sold in its shops were authentic artistic statements worth multiples more than very good copies found on the street corners of New York City.
I'm not sure I buy the Louis Vuitton analogy. Sure, people will buy a book by, say Steven King, because of his name recognition and relatively unique content. But a couple of bad books and the word will get around, and in any case: Is such individualised brand loyalty transferable to a corporation?
True - the same article quotes NYT execs saying that after 2 years they have a print subscriber hooked for life. But is that also true on the web? (I used to be a regular Irish Times Reader, almost cover to cover. Now I dip in and out online as I would with many other sources, and do not ascribe especial value to the Irish Times.)
News is ubiquitous, personal or imaginative stories are not. We live in a sea of news - why pay someone to pre-package it when Google and news feeds can do it so much better? To build a successful brand you have to build an emotional attachment to it. Someone might pay for the NYT because they have a good features section, but news? Index of Frank's Diaries
I had a subscription for 3 years, switching to buying it each day when I moved to Manhattan. When I came back to NY, I only looked at it on the web, stopping to do even that during the Miller/Gordon buildup to the Iraq war. Nowadays, apart from some Krugman columns, I only look at it for the occasional specific NYC story.
The NYT boast had to have been made over a couple bottles of very expensive whine -- which isn't to discount however a truth that time (and an evergreen renewal mechanism) mitigates churn by inducing passivity in subscribers. Look at AOL's base. A crypt. srsly.
As for "a sea of news": Somebodies need to make up their minds. Either the LA-Newscorp-Fox monopolizes "media" markets or it doesn't. If it does, duplication of stories, syndication, and "meme" are fitting attributes. If it doesn't, quantity of LA-Newscorp-Fox referrals online indicates consumer preference.
I'd pick three Varian 1999 imperatives to revenue optimization in a "networked economy" to predict the "migration path" to increasing subscription content over the next ten years.
