The iTunes model?

This is a spin-off to the "charge for online content" thread. If you are tired of this topic, please move on. But I've always been curious about this and finally decided to post my idea for some feedback. I'm sure this idea sucks something fierce but I'm going to give it a try anyway.

Okay, so here goes:

I've never understood why newspapers don't try the iTunes model. For those of you who have never purchased music through the online store at iTunes, let me explain how it works.

1. You create a user name.
2. You register a credit/debit card to your user name.
3. To purchase music with your card -- $0.99 per song, $9.99 per album -- you click a button. You don't even have to re-enter your credit card information if you don't want to. I have mine set up so that it automatically withdraws $0.99 from my account every time I purchase a song. I download a handful of songs each month and I receive the charges on my statement usually within a day or two. It's very easy -- almost too easy.

Here's how I envision it. Newspapers post 3-5 graphs of every story online. If it's an investigative piece, or something big, then yeah, it will probably be more. But as a baseline, enough paragraphs so that the reader will know what the article is about and where it's headed. For a small fee -- $0.20 -- you can read the rest. For $0.35, you can read the whole section. For $0.50, you can read the whole damn paper. Or whatever. I don't really have a clue how the pricing would work. If it's a five-part story, charge a dime per part. If it's enterprise, charge what it's worth. But the bottom line is this: anything can be had for a small price. One click of the button. A charge you won't even notice. Just like iTunes.

And sure, some articles (or sections) will be free. Obituaries. Classified ads. News briefs. Weather reports. Sports scores. Breaking news updates. All that can be free. But not everything.

I have no idea what effect, if any, charging these tiny fees would have on the bottom line. I'm not smart enough to figure that out. But at the very least customers are putting their credit cards on file -- and that would be a heck of a first step toward charging for online content in some capacity. Maybe customers would eventually decide to subscribe at a small weekly fee that would automatically be billed to their credit card. Maybe they'd purchase pictures that could be downloaded in high-res quality. Maybe they would purchase pdf's of newspaper pages. Whatever.

Now tell me how dumb I am. :'(

 

It's not dumb at all. It's worth a try.

The big problem is that songs have repeat value and iTunes has almost no overhead.

 

I doesn't work. Has to do with consumer re-userability.
iTunes, or the a la carte or the micro payment plan works only with continued returns. Plus, there's question of viability even at the highest level.
Michael Kinsley broke it down a few months ago. Give it a read.
It's appropriately titled: "You Can't Sell News by the Slice."

http://www.nytimes.com/2009/02/10/opinion/10kinsley.html?_r=1&scp=2&sq=michael%20kinsley&st=cse

 

Exactly the point I was going to make, and the source I was going to cite.

 

The Times said it, so it must be true!!!!!

Kidding. Hadn't read that article before. Thanks.

 

I think the pay model that eventually will take off for newspapers will be the Kindle model

 

You don't think Apple has overhead with iTunes? You don't think there's a massive server/storage infrastructure somewhere supporting those downloads and making them available? Naive.

 

The storage is relatively simple. The bandwidth probably gets expensive.

Point remains that they don't pay for the content to be created. They sell stuff already sitting around.

 

If you knew how the major labels basically gave all their profits to Apple when starting this endeavor you would know it is a non-starter.

 

101. The expense is in the generating or manufacturing. Distribution can be achieved on many levels in many forms.

 

Web hits would go down. Resulting in small maybe half penny losses for every lost hit. If 25 people skip out for everyone who pays, you've already lost money.

Less web hits means less value to advertisers who already don't get a lot of value with banner ads because nobody clicks on them.

Nobody who reads the paper in print will buy it online or vice versa. There will be no overlap anymore, which I think there is a significant amount of now. It's why total readership is up, even though revenue and hard copy sales are down.

After all that, this is still probably one of the better ideas out there. Better, but probably not good enough. I still am going to be a downer and argue that there is no solution to this problem and it will just work itself out when 90 percent of the outlets fold and the supply meets the demand.

 

This is what we are seeing now --- who knows how long it will take to play out.

"The Times, The Post and a few others probably will survive. When the recession ends, advertising will come back, with fewer places to go. There will be a couple of surprises — local papers that execute their transfer to the Web so brilliantly that they will earn a national readership (like the old Manchester Guardian in England). Or some Web site might mutate into a real Web newspaper.

With even half a dozen papers, the American newspaper industry will be more competitive than it was when there were hundreds."