Submitted by acohill on Tue, 02/23/2010 - 09:07
This article suggests that pay for play is doomed, because no one (according to the data) wants to pay for content.
The problem I see is not paying for content, but pricing. Newspapers and magazines have not adjusted their cost/pricing models to adequately reflect the new distribution costs, which are effectively zero. The Apple revenue share model that is being delivered with the iPad is going to fix this, as it provides a worldwide distribution network for news and magazine startups.
For example, which is better? A million subscribers paying $5/year for an iPad delivered monthly magazine, or 50,000 subscribers paying $20/year? I think it is the former, because the barrier to making the next sale is 75% lower. I'm pretty sure I could produce a pretty nice magazine with a lot of original content on an editorial and writing budget of $5 million/year. Online music took off when Apple changed the pricing structure by creating a low cost distribution system that let the little guys compete with the big guys. The same is about to happen with print, but the big winners will be start-ups.
Community perspective: Guess what? Magazines delivering their content via the Apple Store don't have to be produced in New York any more. Writers and editors can live anywhere in the country with good broadband on Main Street and good broadband at home. But work from home writers, editors, and graphic artists will want business class services, with symmetric bandwidth. That means DSL and cable modem services won't draw these kinds of knowledge workers to your community. Open access fiber, designed right, will attract them.
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The argument presented
The argument presented assumes a million subscribers want to consume the content. The content for newspapers will be mostly local in nature; the magazine content will be theme-based, both of which at specificity levels high enough to greatly diminish the population of subscribers who possess the vehicles necessary to consume the content, down so low that a basement rate of $5/year would not sustain adequate returns. Also to keep in mind, distribution is not the only cost involved. Quality content costs money and someone has to pay for it.
You are absolutely right. In
You are absolutely right. In Roanoke, as an example, there is nothing like a million subscribers, but I currently pay about $18/month for the local newspaper. If I could get the same reading experience online via something like an iPad, I'd happily pay $5/month, not $5/year.
Different kinds of content have different value to potential subscribers. My $5/year was really thinking more about a monthly magazine, and a million subscribers for a monthly publication with specialized content (e.g. hiking, sports, women's issues, etc.) is easily achievable.