Monday, May 9, 2011

Business class vs. Economy online news

Newspapers like the New York Times and Wall Street Journal are currently experimenting with paywalls that prevent non-paying customers from accessing some content. But what if all customers could access the same content, but the "economy" (i.e. free) visitors saw ads and other clutter while the "business class" customers got a cleaner experience? Would that be a viable model?

Oliver Reichenstein argues that it could be, and gives the example of the two pages below. Would you pay a premium to read the one on the right? What else could a publisher do to create premium experience for paying customers, other than restricting content?


11 comments:

  1. Hello Prof Brynjolfsson - I love your query. I'm working for a venture capitalist in New York this summer, and we've been looking at precisely this problem. Who knew your class would be so useful so soon!

    Although I'm a big believer in the value of building a high quality user experience, I can't quite buy-in to Reichenstein's perspective. The website was not earning enough revenue when 100% of the content was covered with annoying ads, so I doubt it would do better with 100%-n -- unless I misunderstand him.

    I had one 15.567-esque thought. How about aggregating the offering across delivery platforms(print, online, tablet, mobile) and charging a bundled price.

    Today's consumer has a plurality of devices and has shown his/her willingness to pay for having their content available anytime, on whatever device they choose (e.g. Hulu ~100 free episodes online, but only ~10 on mobile/tablet. Hulu+ evens the field for $7.99/mo). Print might be difficult to include, since it has a non-zero marginal cost, but I imagine you could play with price. Thoughts?

    Anyway, my two cents. Hope all is well in Boston!

    Best, Joseph

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