Thursday, May 07, 2009

Saving The Newspapers.

I don't know whether Kindle will be saviour of newspapers, in its current form I don't think it will be. The problem for newspapers is that we web users are now used to reading articles from several different newspapers at zero cost ( I reckon I've looked at about 20 - 30 newspapers in the last week), so we aren't willing to revert to paying a significant sum to read just one paper.

The Kindle solution is to offer subscriptions to papers, but that restricts readers to one newspaper. Some newspapers have tried to charge for web articles before but usually the price has been ridiculously high- The Independent used to charge about £1 per article which was more than the whole dead tree publication. Who wants to pay that much?

A traditional newspaper costs 40p to £1.50 and contains dozens to hundreds of articles, so therefore the value of each article is usually pennies or fractions of pennies. Therefore if the newspapers want to start charging for articles in a way that doesn't cause a complete collapse in readership they need to create a system of micro charging, in which users can create an account put some money on it and then browse the web with each publication getting a very small fee per article read, although cumulatively the amount spent per user will be pretty similar to what is currently spent on physical newspapers. The technology exists to do this, google ads use a similar system where each ad clicks generates a few fractions of a cent, so it is feasible.


Matthew said...

I understood that the economics behind a newspaper is that although some articles you would be willing to pay 10p for, others you are only willing to pay 0.01p for, but by bundling them together for a single price, they can capture all that. Furthermore mine preferences will be different to yours.

Once you unbundle it then it becomes very hard to find a price that satisifes enough people for each article.

If you can price discriminate somehow you could get around that, or maybe allow up a certain number of stories from various newspapers a day.

Ross said...

Yeah, that sounds like a good idea.

I'm obviously thinking about it from the pov of a consumer who wants to be able to browse all newspaper without paying the full price of each publication.

I can see the problem it would create for the newspapers, perhaps they could still sell bundles of articles but in smaller packages than the whole paper (ie someone might want to pay for the world news of The Times, the sport section of the Guardian and the Science section of the NYT).

Letters From A Tory said...

Interesting thoughts.

People only want the news that interests them these days and are becoming less willing to pay for a mass of written text of which they only read a small percentage.

James Higham said...

I had this argument yesterday, o ver Private Eye and agree with you.