News and Record’s Weak Pricing Logic

The Greensboro News & Record announced a new digital subscription model that its editor explained in a front page piece of today’s paper. After explaining that all 7-day print subscribers will get digital access for free he described the digital subscription model:

After a special introductory period with rates as low as $9.99 per month, a digital-only subscription will cost slightly more than a seven-day print subscription.

The reason for that variance? A print subscription permits us to subsidize the cost of content by providing access to your home or business for preprinted advertising circulars. A digital-only subscription lacks that advertising subsidy.

Readers who have no subscription may view up to 20 articles or photo galleries every 30 days at no charge. There is no limit on viewing selected content, such as many wire service stories and classified ads.

Here’s the thing: consumers don’t give a sh** why you’re pricing your digital subscription at whatever level it’s priced, they only care that the product is worth the price. What matters to them is whether or not they are getting bang for their buck. Is the content that the N&R is producing worth the price of admission? If so then people will gladly pay it, if not then they’ll find what they need elsewhere or just go without.

I’m willing to bet that part of the thinking is that people will just decide to get the print subscription, and thus opt in to the advertising subsidy, if they price the digital-only higher than the print+ option. That’s logical in a way, but ignores the reality that they have to produce content that’s compelling enough for people to pay for it whether it’s print or digital. They might think they’ve lost a ton of subscribers because those subscribers believe they can get the N&R’s content at the N&R website, but it’s more likely that they lost subscribers because much of the content readers used to get exclusively from the paper – stuff like syndicated columns, wire reports, classified ads, national news, etc. – is now available from a variety of sources. That means the N&R’s only unique product offering is local news/data/information and the last time I looked they hadn’t expanded their local coverage or deepened their editorial bench, which makes it hard to imagine the product being perceived as worthy of the price they’re asking.

4 thoughts on “News and Record’s Weak Pricing Logic

  1. Dale Holder

    Agreed it is a trial and error time for many large newspapers trying to replace lost revenue that comes from advertising dollars. Many think that the revenue of a paper is based on subscriptions or vendor box sales. Truth is that only offsets the cost of distribution. Strong revenue for a newspaper comes from ad content and ad content is driven by strong readership, either in on-land or online medium.
    I’ve always wondered why the News-Record did not spend more attention to unique local content, such as local sports, high school and club sports and then of course local politics and city and county politics. Rhino made it’s mark with the later but not the local sports.
    If anyone can find the balance, this could make the difference. If I can get most of my news from CNN.com or Facebook, only reason I want to visit news-record.com is for local bites I can’t get from national outlets. Digtriad, WXII and even small time Greensborosports.com has filled this void.
    Pricing digital only higher than integrated print + digital just discourages the market place from signing up. Make the digital + print the best value and keep the print alive and drive better content to the online. That is a business model that will be more successful.

    Reply
  2. Jeff

    The Wife has spent at least $1000 per month advertising in the N&R since we opened our store in 2000. Recently, we additionally bought into the BHMG plan for local mobile ads and their brand mgmt app, which is widely available elsewhere.
    Our long-suffering rep had this digital crap foisted upon her with little training. They’d brought her back because the kids they had couldn’t develop and maintain relationships with long term advertisers.
    And now this. First, we dropped our weekly home subscription and recently let the Sunday subscription expire. In the meantime, Wet Fart Gauger singled me out for special treatment during my most recent period of difficulty, allowing lies to be published.
    The Wife, upon hearing this latest news, and since achieving much better marketing success with local and regional mags, is seriously considering ending all business with the N&R after fourteen years of ineffectual response.

    Reply
  3. TL Burriss

    Charging more because they lose out on ad$$ to your home is so narrow minded. I don’t want more junk mail in my mailbox. Digital gets them your mailing address (billing info), email address, Facebook, Twitter, Google+, etc. Maybe even SMS if they’re smart enough. Oops – I just found a problem.

    Reply
  4. Leatherwing

    With digital, their distribution costs approach zero. Digital pages can have ads as well as print pages. But I’ve yet to see a local website set up with any intelligence.
    Example: One of the local TV stations put an ad announcing that you could access their weather site 24/7. It was an auto playing video with their lead meteorologist. Where did it play? On the weather page. Why not use the weather page to advertise your sports and vice versa?

    Reply

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