Quoted by Matt on March 21 2011:
The usual industry angle on these things is to debate whether anyone is willing to pay, or what the price point is, or how it will affect competition. But as much as people point to the success of paid media like iTunes, they forget the key lesson of an average consumer being able to understand that a single song costs $0.99. What do I get from The New York Times for $0.99? Or for $99? I don’t really know, and I don’t know how long it will last. And if as a reader I can’t understand that simple transaction, and can’t anticipate how it affects my behavior of searching, reading, and sharing stories, then I might respond to the whole initiative by just throwing up my hands and going somewhere else.
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3 comments so far
(another) Bob 22 Mar 11
I just cancelled my XM Radio subscription yesterday. My radio came installed in my vehicle so it isn’t portable and I didn’t request it. The business model includes free activation of a trial account, followed by a letter to secure your sign up for a permanent plan. I listen to about 5 minutes of news weekdays, tops. It simply wasn’t worth the monthly subscription price for me so, every six months or so I would renegotiate a reduce rate, usually a promo offer. Yesterday the service rep I spoke with had no offers available, refused to escalate my request, and then we became “disconnected”.
The benefit of occasional use far underwhelms the price for me. Remembering to call every 6 months and spend my quality time on the phone was also a burden. I had already decided to cancel unless they chose to talk me out of it. They did not take that opportunity and had no product that would appeal to the on demand, occasional listener.
Unfortunately, the last person I spoke with at XM, Tim, was the most professional and friendly of all of the XM associates I’d spoken to in my 2+ years of service. If only he had been in front of the process.
Take away for XM: 1) One size product doesn’t fit all; 2) In a tiered service rep model, you might want to move customers requesting to cancel their service to the top tier; 3) Since you’re covering the air waves with your service, whether I’m listening or not, you can’t lose by offering a lower cost product, maybe tied to a self service (low cost, paperless) payment model to offset the minmal additional cost.
Speaking of business models, I have commented before about Blockbuster’s “hooked on fees” model that gave way to Netflix’s no late fees model. Now, former CEO of Blockbuster, John Antioco, says in a HBR article that he had other plans . http://hbr.org/2011/04/how-i-did-it-blockbusters-former-ceo-on-sparring-with-an-activist-shareholder/ar/1
Zachary 22 Mar 11
I couldn’t agree more with the simple transaction idea in regards to news articles. Why don’t they go piecemeal in much the same way as music – first paragraph or two for free, buy the whole article for a fixed price (a quarter?). Subscriptions aren’t gonna fly, but I know I’d pay a small amount per article.
Dr. No 22 Mar 11
The best model ever is Netfix: $8.00 per month, unlimited streaming of 720p movies and TV stuff, no fuss, no muss, all legit.
Same service will soon appear for music: unlimited streaming, CD or higher quality.
And yes, newspaper and magazine service; a company similar to Netflix will offer unlimited reading of various newsprint and magazines worldwide, for a symbolic, fixed fee.
That will eventually kill off iTunes, NYT etc. subscriptions or various micro payment deals.
The thing is, in this day and age, no one wants to download and hoard shit. Ever since I’ve switched to Netflix, I’m not downloading movies and TV, and I’m slowly getting rid of all my DVDs & blu rays. That’s just clutter I can’t wait to get rid of.
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