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Sunday, March 28, 2010

Media / Tech How Not to Price an iPad Newspaper

Posted by Anthony Hecht on Sun, Mar 28, 2010 at 9:47 PM

Paul mentioned this the other day, but I have a little more to say about the Wall Street Journal's iPad edition pricing.

In case you missed it, getting the WSJ on your iPad will cost you $17.99 per month. That's $4.15 a week, or $215 a year.

For comparison, you can currently get the print AND online editions for $140 a year.

Sure, the iPad can be seen as an expensive luxury device, and I'm sure the WSJ figures they can hit these fat-cat fanboys with a big price tag and nobody will complain, but I think (I hope) they're wrong. People are going to get savvy (if they're not already) to the fact that you can't make the "journalism is expensive" argument, and then charge MORE for delivering the same content in a much cheaper way.

People understand that paper, ink, and distribution are huge costs for the print edition, and that delivering the WSJ to an iPad costs little or nothing more than delivering it on the web or to an iPhone. Once the app is built, delivery is pretty close to free, and it will get even cheaper. To charge more for this than for actually printing a physical newspaper, putting it in a truck and driving it to your damn house is ludicrous and insulting, especially considering the iPad has a full-featured (yes, yes, except Flash) web browser.

Smart publishers will figure out that they CAN charge for content on these devices IF they offer a better experience and better features (offline storage, easy bookmarking and sharing tools, more paper-like browsing, etc.), but they better make the price fair, or no one will bite.

The print publishing industry has a huge opportunity here, but if this is the way they're going to approach it, they're going to blow it, again.

Comments (17) RSS

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Holy carbon foot print. Nice to see the WSJ has a price point that is making peoples attempts to be green, well, not so economically sound.

Thanks for killing more trees WSJ.

Posted by Theshue on March 28, 2010 at 10:00 PM

the WSJ correctly figures that people who buy an iPad are ponces with money to burn, hence the pricing

Posted by Reader1 on March 28, 2010 at 10:17 PM

As a journalism student, this kinda scares the shit out of me.

Posted by Ness

on March 28, 2010 at 10:32 PM

WSJ hands out printed copies of their website?

@3, there are Journalism Schools?

What a crazy world I live in.

Posted by jvm on March 29, 2010 at 12:12 AM

@4, that's actually quite a fantastic article. Exactly the reason I'm in a two year program at a technical school that's about as hands on as you can get.

That being said, we're told on a near-daily basis how screwed we are for jobs in the future. But hey, I figure it's a lot more useful than an English degree. ;)

Posted by Ness

on March 29, 2010 at 1:00 AM

Paul and the iPad are tools, but you Mr. Hecht, I want have your babies.

Posted by Wendy765 on March 29, 2010 at 1:01 AM

Thanks for finally making the point that as the cost of production falls, mysteriously the cost off the product rises -- dramatically. Unfortunately, suggesting that readers of the WSJ will "wise up" is a little absurd, since most of the subscribers expense their subscriptions anyway.

Posted by mmennonno

on March 29, 2010 at 4:20 AM

Interesting. That's more than the Kindle edition, $14.95 (which is a ripoff too). The Kindle edition doesn't include several important parts of the paper no stock quotes, no "What's New" section. I wonder if the iPad version will.

That introductory price for print, or print + online, doesn't continue; I think if you stick around you pay $250 a year. But still -- the e-book reader version being crippled doesn't speak well for their long-term plans in this arena.

Posted by Fnarf

on March 29, 2010 at 4:36 AM

While there is a long tradition of charging early adopters of a technology more (Apple, obviously, is a master of this technique), I would guess that the WSJ isn't so much trying to gouge people here, but rather that there are hidden costs we don't know about. First of all, I presume WSJ has to pay some portion of its iPad sales to Apple, the way that record companies who sell their songs on iTunes do. Secondly, I don't know what the ad model is for iPad, but I'm guessing there's not as much ad space, etc. Then there are the app development costs, conversion costs, and everything else. I would add that it's good for the journalism industry if they are able to suck a little extra money out of the less... price sensitive people who are going rush out and buy an iPad. When Apple does it, everyone applauds; when the WSJ does it, it's wrong?

Posted by Mr Me on March 29, 2010 at 5:11 AM

I don't know a lot about the art of pricing, but I learned in business school that it's much easier to lower your price than to raise it once customers learn to accept a certain level. If you set it to low to begin with, it's tough to ever get it up where it needs to be. If you set it too high, you can always lower it--thus a high initial price gives you more flexibility. We're probably seeing a little of that going on here. I would say that the WSJ knows something about business.

Posted by David from Chicago on March 29, 2010 at 6:02 AM

I love that the times lets me read the rest of the week online because I buy the sunday delivery edition. I don't have to feel bad about wasting papers that I don't read since I can't keep up with the whole times everyday, and they get paid.

Posted by econoline on March 29, 2010 at 6:50 AM

The whole electronic books/newspaper pricing structure is a bit insane to me. I am an avid reader, but just have not sprung for a Kindle or anything yet. I can buy used books for much less and have a copy I can keep- and I like lots of older mystery series. For convenience, it would be nice to have electronic copies, but they cost far more. New paperbacks are about the same as their electronic versions.

I think the best part of electronic media is going to happen when authors can tell publishers to take a hike and sell their books themselves. This should happen with music one day as well. Books and CDs will cost less, and the artists will make more. I much prefer to order CDs from artist websites. (Michelle Malone signs all the CDs I buy from her and includes little notes.)

Posted by gttim on March 29, 2010 at 7:16 AM

Also, on the WSJ. They are probably betting that people just have their company pay for their subscription, so they can charge more.

Posted by gttim on March 29, 2010 at 7:17 AM

I use an iPad every 4 weeks for 3 or 4 days

Posted by Suzyz sister Jill on March 29, 2010 at 7:19 AM

@9 - The pricing model for iPhone and iPad apps is well known. Apple gets 30%. That's a significant cut, for sure, but the big difference here is that pretty much the only ongoing costs for delivering content to a new digital device is bandwidth. Development costs are made back, they can create as many ad placements on an iPad edition as they like, etc. Conversion costs are development costs. Once the software to convert their existing content to this format is built (if that's even necessary, they may use existing data in RSS or XML formats they generate already), the development costs start being paid back. There's no comparison to the fixed, and rising, costs of creating and delivering a physical newspaper.

@8 - Your right about the introductory price, but in any case the digital edition prices are way too high.

Posted by Anthony Hecht on March 29, 2010 at 7:53 AM

so wait, why are we wanting any news corp property to thrive?

Posted by let them all burn on March 29, 2010 at 9:11 AM