Friday, April 8, 2011

Pay What You Like News?

As the New York Times slowly fails and becomes an acquisition target, they've turned over to a subscription-based model akin to that for the Financial Times and the Wall Street Journal. I find their $3.75/week (with 99-cent first month sign-up promotion) digital price insultingly high, but I assume they've done the breakeven analysis on it and that is how they can make the most money off the digital edition.

I wonder what would happen if they did a pay-what-you-like subscription model (with a minimum per week and guidelines by income class). Do you think they would make more or less money as a result? Attrition would go down less than with the $3.75 price, but would they make up the difference with volume?

Let's make an assumption: 10% of their 30 million unique readers per month will sign up for the new service. At $3.75/week, that's $45 million in monthly income. If instead, 50% of the readership signs up for pay-you-like, the pay-what-you-like price would have to average 75 cents per week to "break even". If 70% of the readership signs up, the breakeven would be 26 cents per week. What do you all think of these numbers?

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