How news becomes more like cable TV as paywalls and meters give way to bundled subscriptions

Helsingin Sanomat, the leading national daily in Finland, decided back in 2006 to offer a "Combo" subscription to print and all digital versions of the paper.

Five years later (with an iPad version now in play too) Helsingen Sanomat  has 120,000 subscribers to the combo, a third of its subscription base. Now, 80 percent of new subscription sales are for that package.

A new report from the International Newsmedia Marketing Association (INMA) suggests that the Finnish paper is ahead of the curve, but that bundled news subscriptions are catching fire in the United States and Northern Europe as a logical way to serve customers' varying digital preferences.

To my mind, the INMA advances the great paywall debate by refocusing it. The "wall" and its cousin, "the metered model," make it sound as if the main point is to create a barrier to freeloaders.

The better objective is to find the right mix of digital offers at the right price points to stabilize and grow subscription numbers and revenue.

INMA picked 14 case study sites, all in affluent countries where smart phone penetration is high and iPad adoption has been fast. Each news organization has discovered, as the report puts it, that "the real nub of what bundling in the digital age embraces is how to keep people loyal to one particular newsmedia brand, across all platforms, and to charge appropriately for that."

From that common objective, the bundles offered are wildly divergent, especially in pricing.  On average a digital-only bundle costs 53 percent of the "all you can eat" print/digital package, subscription, INMA found in the organizations surveyed. That seems to reflect a value proposition that the digital customer gets a break reflecting the huge savings in paper and distribution costs.

But some organizations turn that idea on its head. As noted in my post a week ago on Sunday print editions, The New York Times and Boston Globe, in effect, offer the Sunday paper free to digital subscribers.

The Oklahoman goes a a step further. Print home delivery bundled with full digital access costs $12 a month; digital-only costs $15 a month. So the Oklahoma City paper is effectively paying digitally inclined readers $3 a month if they get the print edition as well. (A single-platform digital subscription goes for $10 a month).

The Straits Times of Singapore also prices an "all in one" print digital package for $1 a month less than an iPhone/iPad/online offer.

Pricing wasn't the only variation among the news organizations. The last page of the report says nine of the 14 companies studied were "significant outliers" in one way or another.  Among the unusual features:

  • The Day of New London, Connecticut, began this September offering four different packages but each with premium "membership benefits" like rewards, giveaways and access to special events.
  • German publisher Axel Springer offers a "hardware bundle." Subscribers who commit for two years to one of three newspapers at 50 Euros per month get full print and digital access and a new iPad2. (The Philadelphia Inquirer has a similar offer with a less expensive tablet).
  • NRC Handelsblad in the Netherlands has "debundled" its offers. Only full-week print subscribers get total access for free. Those who take the print edition less often pay for digital add-ons on a sliding scale.
  • The Guardian, while keeping its main website free, prices other digital versions on a case-by-case basis. So, for instance, its iPhone app is by paid subscription while a similar offering on Android systems is free and entirely ad-supported.

The complexity of the bundle offers reflects the proliferation of platforms and content versions, including digital replica editions which have proved surprisingly popular both here and abroad.

Quick embrace of the bundle model can also be explained by the near certainty that smart phone use and tablet sales are headed up on a steep curve over the next several years.  Media organizations who offer their customers the whole-brand option first are ahead of lagging competitors for mindshare as well as revenues.

And having several different offerings is essential given the generational breakdown among readers. Many are receptive to moving back and forth among platforms and an attractively priced all-access package.

But INMA found that companies are encountering surprising resistance from some older print readers to sampling digital versions or registering for them. Conversely some under-30 readers may never read or, at least, never pay for a print copy, so they need to be sold a digital-only option.

The report suggests that customers are not necessarily clamoring for these combinations -- they need to be sold. So it counsels that extremely clear and prominent offers, laying out each option, are worth the expenditure of extra time and money. Too many permutations can be confusing. And some care must be taken so the digital-only crowd do not feel like second-class citizens.

INMA says that news publishers should be looking at "triple-play" and "quadruple-play" bundles already offered for telecommunications, movies and music.

Under an optimistic scenario, it hypothesizes, the news industry might come to be more like cable television, where most subscribers choose to take not just the basic service but upgrades like premium channels and broadband connection.

I am not about to bet the store that all that will happen. But I think INMA has it right that the next phase in the development of paid digital content will find organizations moving fast to bundles, thus positioning themselves for that possibility.

The 41-page report, "Pricing and Packaging the Bundled News Subscription," is available free to INMA members and for $295 to others. It was written by INMA executive director Earl Wilkinson and freelancers Dawn McMullan and Paul Skeldon.


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