Digital environment creates possibilities for new price mechanics

The music and movie industries are not the only ones that face a troubled transition to doing business online. In the news paper industry, the change isn’t easy to make either.

It would be unfair to say that the sector is watching submissively as the subscriber base is shrinking and the income from advertisement declines. Within the sector, many experiments take place to find new ways of reporting the news and presenting it to readers. To name a few Dutch examples: NRC next developed a blog to discuss the background of highlighted topics. Skoeps and Dag aimed to reward people for amateur journalism and photography (which, by the way wasn’t successful). Newspapers form the Rupert Murdoch stable like the Wall Street Journal and The Times migrated to a paywall model. The long term results of these moves have yet to emerge.

However, media-expert Robert Picard says, what newspapers hardly do is changing to mew models of pricing their content. The price of a newspaper has always been based on the cost of producing it. The reader pays a price that results from adding the costs of the editors, the presses and the newspaper boys and a small margin for the publisher and subtracting the advertising income.

In the online environment, this model does not work all that well, says Picard. Or, it is incomplete at least. Moving to a digital newspaper creates possibilities to base the price of news in different ways, not based only on the cost they represent, but also based on the value it brings readers. Elements like convenience, service and partial access to selected topics can now be included in setting the price.

A number of questions that publishers are faced with is: how to combine a printed version with an online version? Do we offer partial subscriptions by platform, or by topic as well? Do we use social media as a means of sharing news? Do we price articles, topics, or the amount of time access is given?

Determining a good price for news and backgrounds online requires more than before a strategy that is well thought through and carefully considers all the options. The number of strategic choices has increased exponentially with the number of channels.