The Economist’s digital strategy and the limits of a model based on advertising
niemanlab.org
niemanlab.org
What was worse that since the cover price where I live (New Zealand) is much high than the US I was paying 2.5 times the US price to subscribe to exactly the same digital product, without even the excuse of delivery costs. So I changed my address to the US.
More details here:
http://blog.darkmere.gen.nz/2015/03/parallel-importing-vs-th...
The Economist's attempts at creating a sensible digital pricing model has just been a range of awful options. From the Kindle, to the iPad, etc.
To say nothing of the fact that it's still cheaper to just find a decent discount on the print edition and access the web version via that account, than it is to save the materials and costs and go digital-only.
For all the normative claims they make about the need for better environmentalism and economic policies, they sure seem to have difficulty keeping their own house in order.
I thought I had found a clever trick when I called them and asked them to stop physical delivery ( as will they do if you're going on an extended trip, for example ). The next week they also suspended my digital access...
I tried to explain to them that I didn't actually want the paper copy but it didn't register with them. When it came to renew, I let the subscription lapse because it felt so wasteful to be throwing the magazine straight from the letterbox into the recycling bin. And I wasn't prepared to pay more to go without the paper!
With only one or two exceptions where I like to keep print copies around for reference (or for travel use where I want something disposable–don't want to leave an iPad on the beach or by the pool, for example), I'm the same as you: it arrives, it goes straight to recycling, and I read it on my iPad/Kindle/whatever. Last year I went on a tear, trying to stop all paper delivery while retaining digital access.
Turns out very, very few publications were helpful. Everyone understood why I wanted to do it, but they make their ad money off of paper copies shipped. So, as with the Economist, you have a lot of rags who're talking the talk about conservation, provided it doesn't cost them a penny.
Sure, they'll charge the customer more for less.
A couple were great about it: a quick email and it was moved over to Newsstand, or their app, etc. But the rest, the bigger publications, almost uniformly baulked, and could never make it happen.
I even considered trying to shame them by creating a site so everyone see who's forward-thinking, and who's myopic. I may yet.
It kind of reaffirmed my view that the whole print industry is a broken model. The end result is that I canceled a bunch of subscriptions, since the ones that are supposed to have credibility about world affairs just lost it in my eyes, I couldn't take them seriously (not that I ever should have).
It's also made me extra sensitive to the whored-out nature of publications that take ad dollars.
As a result, I canceled a bunch of subscriptions, and focused my energy on the ones that operate from subscription models (which are more expensive individually, but I saved more than that getting there).
Turns out I'm getting better information, paying more attention to it, and don't have a stack of magazines to worry about recycling every month.
As in, if it costs $2 to deliver a print, and the content costs $4 to produce, and you want $1 of profit, you price it at $7.
If you take out the cost of delivery, and find that the software team (hosting, apps, web design, database etc) costs $1 which replaces the $2 print delivery, you price it at $6.
The $6 would be pretty much universal, the $7 might be $9 in some places where delivery is expensive.
Anyway their current pricing is one of those things that the market should sort out in a few years. Seems like they can temporarily get away with charging 2.5x the American price because the costs of mailing is so expensive. But once you get other media going fully digital, or even partially digital, with the ability to massively undercut that price while staying profitable, you'll probably see prices come down a bit (or stop growing as fast as the rest of the world.)
Shitty thing to do though. On the other hand, consider this... NZ is probably a bit of an outlier. A place without a big enough market to make massive shipments by relatively cheap water, forced to do expensive shipping, and small enough for local printing not to make much sense logistically, creating a huge gap between digital costs and print costs. A discount-on-print is probably a pretty smart, easy, straightforward and fair pricing model almost everywhere else. Is it a better alternative to go with a pricing model more convoluted, more volatile and less straightforward for the entire world market, to accommodate a small market? I might have made a similar pricing decision if I worked there. Anyone got other good ideas?
Wow, that's actually true (though I'm in Europe). I can consider myself lucky to have taken a 3-year subscription last summer under old pricing model. Now it's almost twice the price, it would also make me think twice now before renewing. I love the Economist and I do take a look at the Espresso from time to time, it's really well done, but, as a long time subscriber, I'm not willing to finance their video or "Buzzfeed model" experiments.
Annual subscription in the UK: £126 (~$187)
In the UK, we're being charged nearly 1.5 times as much and The Economist is based here!
Most Indians will not be able to buy it if the cost was 400 NZD per year but maybe New Zealanders can afford to pay 400 NZD per year.
I used to be a regular read of TE, but stopped last year because of the infuriating and endless propaganda re: Putin and Russia. The topics they write about where the editors have very strong opinions on controversial topics have always been by far the worst of their output.
As Standage points out, people read TE to feel at the end like they're informed. To read TE and at the end feel like I've been treated like a child, or shovelled a big steaming plate of angry warmongering ... well, it didn't give me the TE experience I was paying for.
They should have learned from their experience of strongly supporting the invasion of Iraq, but apparently no such luck. I hoped after Micklethwait left they'd get a grip on this but it only got worse. They just don't seem capable of talking about wars or foreign policy with anything like the same detachment that they'd discuss e.g. the economy of Indonesia.
When I read on the BBC occasionally I read something eyebrow raising too, but it's much, much rarer. They have a specific commitment to being unbiased, they clearly separate fact from opinion instead of mixing them and overall they don't seem to have many journalists or editors with extreme opinions. The BBC's accuracy suffers badly however from being a real time news organisation. Whenever I read something that's clearly (factual) nonsense on the Beeb it's pretty obviously always because someone who wasn't a subject matter expert had to throw together a story within an hour and struggled to do it well.
A combination of the two approaches would be something I'd happily pay for again.
"the idea that news organizations can hand over their content so it can be consumed on other platforms. The advantage, obviously, is reach, and maybe that model works [...] I’m not sure it does — it just means you’re splitting the advertising revenue with someone else.
Standage assumes this model can only work where "other platforms" are sustained by advertising, but I think that's not the case. Any app with a subscription model could do it, and at that point you as a news org are actually tapping into their revenues, regardless of where they come from. I think the first reputable news org that will make its content developer-friendly from a licensing perspective, will soon become a platform for all sorts of revenue-generating experiments.
Software and hardware devices will keep expanding -- any news org in isolation will constantly struggle to keep on. The Economist were among the first to launch on iOS, Android and Kindle, but they've missed other boats likes Snapchat Discover and this can only happen more and more frequently as the web expands. The only way to exploit this is to leave the minutia of platform-specific tweaks to other developers, and concentrate on producing great content people want to pay for.
Except then somebody else mentions something else that the Economist hasn't talked about, or shares another article on Facebook and then you still have to go read that, or be left out.
Plus just getting your news once a week: 9/11 happened on a Tuesday, you wouldn't know until friday. The US president is elected wednesday night, you don't know until friday which means the people you talk with are going to assume you are a fool.
The Economist's weekly schedule filters out a lot of the useless noise and it gives time to write in-depth analysis rather than just bloating up non-news to fill the 24h news cycle. As a result I have a much more in-depth understanding of the current affairs than I had before. Of course my view also gets slanted by The Economist's biases, but those biases are at least well justified and supported most of the time.
Of course that does not mean I'm blind to the world around me. When a president gets elected or 9/11 happens or something else that actually matters, I will hear about it. It's just that a lot of the useless noise masquerading as "news" gets filtered out.
I am not convinced that the value/impact of the 1% doesn't drastically outvalue the rest. That said it seems they are offering a month free so I guess I should go have a look.
You seem to believe that the Economist is a newspaper. They clearly say they are _not_. They are a news _filter_
I find The Economist's core idea to be very good. They "he promise we make to the reader is that if you trust us to filter and distill the news," They do not aim to be reporting the latest breaking news like CNN or Twitter, in real time. They aim to be the only media you need to read to understand "what matters in the world and what’s going on." No small undertaking, but a great goal.
What I question is the delay. If I have to wait several days to know what is going on, then by definition, I don't know what is going on. Even if I finally catch up on friday, by saturday I will still be behind.
In the first case, the situation is ongoing, plenty of speculation. It's gonna change many times before it's resolved, so unless you're a breaking news junkie, it makes sense to read a well-informed article on who and why when it's over.
In the second case of Iran deal, it's just "we're close to a deal" + some background information. If you take a look at yesterday's Economist, they have a full analytic article on what's happening with the deal and why it's not there yet. It was printed before the article appeared and it actually explains what's happening so that the BBC article becomes useless.
Which is why they launched Espresso, a daily roundup.
It's always been clear they don't want to be a 24h-news org -- they would never have enough resources to compete with the likes of Murdoch, and that's really poor journalism anyway. They basically want to be the most popular think-tank ever -- that's what "thought leadership" means. So they just have to do enough to let you feel like you're in the loop, and then put the hammer down where they want to steer discourse.
Do you really think you wouldn't have noticed through some other channel? It was kind of hard not to be aware of.
The whole anti native advertisement movement seems so late it's silly considering news publishers have been basically doing it for years without any disclaimer. PG wrote about this some back in 2005: http://www.paulgraham.com/submarine.html
Native advertising is the reporting being actually bought and paying directly. Native advertising is a natural outcome of a struggling business model - they looked at what they were doing around PR and concluded that they could make actual revenue on it.
What is Dow Jones doing that's similar?
Unfortunately, the legal and financial problems with those kinds of systems have kept that from becoming a reality. It's not a particularly difficult technical challenge.
I think that's a concern, but it's not a bigger problem than money laundering or illegal activity or anything else that micro-payment systems have had to deal with.
With micro-payments, you can't deal in actual currency. You have to move around some kind of "Credits" that at some point get exchanged back to currency in bulk to a payment processor, otherwise the transaction fees are greater than the payments themselves. This is dollar signs in the eyes of anybody who likes to play games with international money.
It's a space for cryptocurrency to be sure, but the push-based architecture makes recurring subscriptions a little tricky from a user standpoint. Not to mention that the user has to have cryptocurrency to begin with.
Which prompts me to wonder why transaction fees are so high.
Hm. Conventional wisdom is that at least for websites making money off of adsense, you don't want to advertise to Engineers, because like most sophisticated customers they don't click on ads.
My take is that the class of consumers willing to pay money to block ads is likely to be more sophisticated than average, and thus less likely to click on ads.
Engineers will click on ads for products that are interesting for them. The fact that they won't click on most ads are an issue with the quality of that ad or product.
Digital Ocean advertise in my Twitter feed, but I am already a customer of theirs, otherwise I would be very tempted to click.
Most ads and most products suck so badly, but that isn't an issue with the advertising model.
Huh. See, I have been using digital ocean as an example of how a good product can overcome terrible advertising, and how what really matters in the VPS market is how much ram/disk you are handing out per dollar you charge.
But then, I'm thinking of their animated ads (Which I see all the time, 'cause apparently google thinks I really want to watch ads produced by my competitors.)
wait, i thought this conversation started when I said something like "Engineers don't click on ads" and then you said something like "But I click on ads"
Now it comes out that you use adblock, which does seem to support my thesis in the general case.
I think of clicking on ads, well, a lot like how I think of talking with salesmen. I'm not immune to manipulation by skilled salespeople, so I go out of my way to be conscious of the source of any particular bit of information I receive when I'm buying something. I know that I'm going to make worse decisions with a skilled salesman in the room.
First I would notice that their offer appeals to me. Then I would click the ad to see more details and then finally I might do independent research into their claims and see if there are better offers.
That is pretty much how I would go about getting anything substantial purchased anyway.
Huh. That's interesting, because it certainly is my impression that most online advertising is click-based, but I have little experience of the high end.
I know that I spend all my ad dollars on (or what I spent my ad dollars on when I spent ad dollars) are attempts at brand building. The thing is, if you really want to build your brand, you don't want the ads to be about you... you want the content to be about you. And that's kind of a different problem, at least if you are targeting sophisticated customers who won't read publications where the content is obviously bought.
Ugh.
The only company that can actually target ads is Twitter.
Also, advertising certainly does work. Just not so well for organizations like The Economist, because they are pressured by new media companies like Facebook, which have the eyeballs and the necessary targeting options to deliver the same audience cheaper, plus every other audience you can imagine.
That is to say, would Twitter be better at making money if it had ads that were targeted worse?