Newsday Exec: We Didn't Put Up A Paywall To Get People To Pay

from the success! dept

With lots of people finding it rather amusing that a grand total of 35 people have subscribed to Newsday's paywall, a Newsday exec has responded by saying the purpose of the paywall was never about getting people to pay in the first place. It's all about reducing churn from cable subscribers. While the exec claims that those mocking the low number of subscribers ignored this, that's not at all true. In fact, at least in our case, the very title of our post about Newsday's paywall was all about how it was designed to reduce churn for Cablevision subscribers. The bigger point that people were making wasn't specifically about Newsday, but to alert all of those other folks who seem to think that people will jump up and pay for online access to their local newspaper. As Newsday is discovering, that's not the case.

Furthermore, if the goal was just to reduce churn, with no interest in getting outside subscribers, why offer a subscription plan at all? Why not just limit access to those who subscribe to Cablevision? Claiming no interest in signing up outside subscribers is shown to be a lie in the fact that they set up a system specifically to do just that.


Reader Comments (rss)

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    The Anti-Mike (profile), Jan 29th, 2010 @ 1:18pm

    Claiming no interest in signing up outside subscribers is shown to be a lie in the fact that they set up a system specifically to do just that.

    Sort of jumping to a conclusion here, no?

    Putting up a subscription door gives them the chance to create a market price for site, basically defining a "value" for the cablevision subscribers. It isn't any different from putting a $129.99 MSRP on a product, and then always selling it at $99.99. The higher price is just to create the illusion of value.

    If you say to cablevision subscribers "you are getting access to newsday, it's free for all subscribers", that is nice. When you say "you are getting access to newsday, a $19.95 a month value, free as part of your subscription" then you have created at least the illusion of a good deal.

    Without the subscription door, that isn't possible.

    So I would have to say that you are drawing a conclusion Mike that is easily shown not to be 100% true.

     

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      Dark Helmet (profile), Jan 29th, 2010 @ 1:26pm

      Re:

      "Putting up a subscription door gives them the chance to create a market price for site, basically defining a "value" for the cablevision subscribers."

      Sigh, no, I don't think so. You want to define the value of the service, create a little mystique, and pump the value of the subscription? DON'T ALLOW ANYONE W/O A SUBSCRIPTION TO GET IN THE DOOR. THAT builds value through scarcity, not price (which we know aren't the same). It's the same theory that private golf clubs operate on. The only reason to charge for the service for outsiders is to make money on it.

      "It isn't any different from putting a $129.99 MSRP on a product, and then always selling it at $99.99."

      Uh....what? What manufacturer in the world builds an MSRP price and then directly sells below it "always"? Are you familiar with how partner systems work? Distribution channels? Manufacturers RARELY sell below MSRP....they let their distribution partners do that, because doing so provides a benefit to EVERYONE.

      "If you say to cablevision subscribers "you are getting access to newsday, it's free for all subscribers", that is nice. When you say "you are getting access to newsday, a $19.95 a month value, free as part of your subscription" then you have created at least the illusion of a good deal."

      If that's what their doing, then they're retarded, because it's just as easy and arguable more effective to say, "You're getting access to Newsday because you're a subscriber, and no one else has access to it but you", and at least that way you're not creating "illusions" like some kind of scheister Hudini....

      "Without the subscription door, that isn't possible."

      Sure it is. Brick up the subscription door and build a wall instead.

       

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        :Lobo Santo (profile), Jan 29th, 2010 @ 1:33pm

        Re: Re:

        Thanx for handling my light work DH.

         

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          Dark Helmet (profile), Jan 29th, 2010 @ 1:36pm

          Re: Re: Re:

          Well, look, to be fair his comments make sense on the surface. But taken to their logical conclusion they just don't...and that comment about MSRP and manufacturers or providers selling below it....well c'mon, everyone involved in any kind of tech industry should know that's not how it works.

          Who hasn't worked for or utilized a VAR at some point?

           

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        The Anti-Mike (profile), Jan 29th, 2010 @ 1:45pm

        Re: Re:

        What manufacturer in the world builds an MSRP price and then directly sells below it "always"?

        Sorry if I don't explain it clearly enough for you. The MSRP price on almost every piece of electronics in the world is a joke, rarely followed in the retail market.

        The $129.99 MSRP is for a product that wholesales at $79.99, and the retailers push it out at $99.99. Nobody in the marketplace actually pays MSRP. It is more of a maximum price rather than anything else. Please check current prices in your market for printers, example. Retail price is NEVER the MSRP for the product.

        If that's what their doing, then they're retarded, because it's just as easy and arguable more effective to say, "You're getting access to Newsday because you're a subscriber, and no one else has access to it but you", and at least that way you're not creating "illusions" like some kind of scheister Hudini....

        All I can say is you need to spend more time working in marketing, and more time paying attention to some of the best crafted offers you will read. They all create the illusion of value (really artificial value) that allows the consumer to feel good about what the are paying for.

        You may want to read this book, I think it explains it well (I haven't read it yet, copy is on order):

        http://www.amazon.com/Priceless-Knowing-Price-Everything-Nothing/dp/1565848500/ref=sr_1_1 ?ie=UTF8&qid=1264801469&sr=8-1

         

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          The Anti-Mike (profile), Jan 29th, 2010 @ 1:56pm

          Re: Re: Re:

           

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          Dark Helmet (profile), Jan 29th, 2010 @ 1:59pm

          Re: Re: Re:

          "Sorry if I don't explain it clearly enough for you."

          Nice dig at me. C'mon, no reason for douchery here....

          "The MSRP price on almost every piece of electronics in the world is a joke, rarely followed in the retail market."

          That's kinda/sorta normally the case. Kinda. MSRP is the price set for one person/company to buy one unit direct from the manufacturer. It has all kinds of factors built into it: cost average on shipping per unit, order placement time/cost per unit, material expenditures (paper, packaging, shipping materials, etc.) per unit, etc. You'll notice that all of those things are affected by volume, and that price per unit can be drastically reduced by volume. This is why MSRP is so much higher, because it is the cost for one customer to buy one unit direct.

          Places like Ingram Micro and Synnex on the business side, and Best Buy and Staples on the retail side can charge below MSRP, because they buy in such a volume that all of those per unit costs are drastically reduced. It's also why with smaller retail chains, you'll notice one of two things: either they have a higher price or smaller selection. Because they're either buying all the parts at less volume, creating higher price per unit, or they're buying at the same volume buy only select parts, giving them that low price on what they DO have.

          "Please check current prices in your market for printers, example. Retail price is NEVER the MSRP for the product."

          Actually, it almost ALWAYS is, if you buy direct. I'm not sure if that's outside of your definition of retail or not, maybe that's the disconnect. But in the case of printers, HP regularly sells their printers direct at MSRP. In fact, HP sells nearly all their technology products at MSRP if you buy direct. Same w/Barracuda Networks.

          "They all create the illusion of value (really artificial value) that allows the consumer to feel good about what the are paying for."

          To a degree, I suppose that's true. Normally there has to be at least SOME upside for the consumer, however, though I agree they tend to overplay this in their descriptions. But that isn't the point, the point was that in this case they could have achieved the same ends w/o resulting to douchery....if they truly weren't interested in making any money of the subscriptions. In this case, logic precludes their defense.

          "You may want to read this book, I think it explains it well (I haven't read it yet, copy is on order):"

          LOL, okay, I truly do appreciate the recommendation, and I'll for sure check it out, but that statement had to be written KNOWING someone would pick on it ;)

           

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            Anonymous Coward, Jan 29th, 2010 @ 2:09pm

            Re: Re: Re: Re:

            Nice dig at me. C'mon, no reason for douchery here....

            TAM doesn't need a reason.

             

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            The Anti-Mike (profile), Jan 29th, 2010 @ 2:13pm

            Re: Re: Re: Re:

            the point was that in this case they could have achieved the same ends w/o resulting to douchery

            They are a cable company. douchery is pretty natural, no?

             

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              Dark Helmet (profile), Jan 29th, 2010 @ 2:18pm

              Re: Re: Re: Re: Re:

              "They are a cable company. douchery is pretty natural, no?"

              Ah, something we can agree on (in general). But part of that douchery is backtracking, tap-dancing, and flatout lying.

              Which is what I believe is actually occurring here with their "It doesn't matter because we weren't really trying" defense....

               

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                The Anti-Mike (profile), Jan 29th, 2010 @ 2:21pm

                Re: Re: Re: Re: Re: Re:

                I think we can agree if they got 35,000 subscribers, they would be crowing about their great play. I just don't think they expected to see many signups.

                 

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                  Hephaestus (profile), Jan 29th, 2010 @ 3:43pm

                  Re: Re: Re: Re: Re: Re: Re:

                  Personally I think they are just trying to cover their collective asses. CableVision is after all a publicly traded company. Loosing 650 million USD is something that could get the board reorganized or sued. At this point they are probably hoping the iPad will save them ...

                   

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      DH's love child, Jan 29th, 2010 @ 1:28pm

      Re:

      somebody please turn on the heat down below, because TAM has actually made a valid point. I don't know if I can handle this...

       

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      Alan Gerow (profile), Jan 29th, 2010 @ 2:33pm

      Re:

      You do realize that MSRP stands for "Manufacture's SUGGESTED Retail Price"? Right?

       

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    mrharrysan (profile), Jan 29th, 2010 @ 1:55pm

    You guys are just stuffing yourselves on Trollbait...

     

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    fogbugzd (profile), Jan 29th, 2010 @ 2:23pm

    But did it reduce churn?

    The really interesting question is, did it reduce churn? My guess is that it didn't, because access to Newsday isn't that big of a deal.

    As far as being able to tell customers they get a "$19.95 value" goes, I doubt that it has any effect on customers at all. Consumers are so used to the inflated values that they totally ignore that pitch. In fact, I suspect that a lot of people are like me, and see the advertising of wildly inflated values as a likely sign of a rip-off.

    By the way, I value this post at a $199.95 value.

     

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      Dark Helmet (profile), Jan 29th, 2010 @ 2:27pm

      Re: But did it reduce churn?

      "By the way, I value this post at a $199.95 value."

      Can I buy your posts in bulk and resell them at roughly 15% below your MSRP?

       

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        Anonymous Coward, Jan 29th, 2010 @ 2:35pm

        Re: Re: But did it reduce churn?

        Hey DH, did you give up on your blog? Its value is dropping to zero.

         

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          Dark Helmet (profile), Jan 29th, 2010 @ 2:44pm

          Re: Re: Re: But did it reduce churn?

          Meh, nah, haven't given up on it, but haven't done anything on it for too long. Been working on a new book and very busy at the 9-5 at the moment. But you're right, I should certainly put up the drafts of the first few chapters of what I'm working on....

           

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            The Buzz Saw (profile), Jan 29th, 2010 @ 3:23pm

            Re: Re: Re: Re: But did it reduce churn?

            What's your book about? Can I get the entire PDF free when it's done?

             

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              Dark Helmet (profile), Jan 29th, 2010 @ 7:05pm

              Re: Re: Re: Re: Re: But did it reduce churn?

              I'll tell you what Buzz Saw, since I'm torrent stupid, I'll send you a copy of the PDF I've put together on my last one (a conspiracy thriller) if you agree to put it out on a popular tracker or two and maybe suggest one or two people read it (assuming you like it, of course).

              If that sounds good to you, tell Mike, he knows how to reach me....

               

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    Danny (profile), Jan 29th, 2010 @ 2:41pm

    Huh?

    Newsday makes no sense.

    I am not a Cablevision subscriber.

    Newsday says they aren't interested in a paywall to get people to pay.

    I go to the Newsday site, but can't read their product as I haven't paid.

    Don't they want me to read their product (and see the ads on those pages?)

     

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    RD, Jan 29th, 2010 @ 2:50pm

    Sadly, not true

    "Sorry if I don't explain it clearly enough for you. The MSRP price on almost every piece of electronics in the world is a joke, rarely followed in the retail market."

    Sadly, not quite true. Any Apple product, any video game system and games, any Microsoft product....these are very large products and markets, and they are price-locked at the source. The retailer has no say in discounting these.

     

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      The Anti-Mike (profile), Jan 29th, 2010 @ 3:03pm

      Re: Sadly, not true

      In the software world, typically there are few discounts.

      In the hardware world, discounts abound. Careful shopping at christmas means I got a gaming console for a gift about $20 lower than "the price". I could have also paid "the price" but received an extra game for free. the MSRP wasn't the final price.

      Even Microsoft hardware (keyboards and such) have variable prices, a little shopping can find you a wide variety of prices at retail, and pretty much all over them lower than MSRP.

       

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