Dear New York Times & Wall Street Journal: How About Some Sensible Digital Subscription Pricing?

The New York Times is launching new video ads to convince people they should pay for its content. Here’s a thought. If the New York Times, or the Wall Street Journal for that matter, want to be paid what they’re worth, how about giving subscribers a set price they can depend on? A price that doesn’t overcharge the digital subscriber? Below, a case study on the deliberate pricing confusion both publications pursue.

How I Got My WSJ On

Way back in 2009, I received some junk mail from the Wall Street Journal offering me the paper for $100 per year. For me, it was a no brainer. I love reading a print newspaper. Getting a high-quality paper six days per week for cheaper than I could get my own local paper, the Los Angeles Times? Bring it on, especially since I’d also get easy access past the long-existing WSJ paywall.

After a year, my subscription expired. I got a few notices, but I balked at paying the $250 (if I recall right) that the WSJ wanted me to pay to renew. If it was worth $100 for an entire year, what made it suddenly worth 2.5 times that amount the next?

Of course, the answer — in part — was that I’d been given an introductory rate. The goal was to get me hooked. Unfortunately for the WSJ, I didn’t need the paper that bad to stay hooked for the higher price. I chose not to renew.

That didn’t stop the papers from coming. Nope, for three months, they continue to be delivered. It was even inconvenient that I couldn’t put them on a vacation hold, since I no longer had an official account.

About a week after they stopped coming, I got a phone call. It was the WSJ, wanting me to renew and offering me that same $100 rate. I was happy to take that again.

In late 2011, the notices came again that my subscription was expiring. By this point, I’d learned that if I just let the paper expire, I’d probably continue to get it for free. If I didn’t, inevitably I’d get a call urging me to renew at a lower rate. So, I let the subscription expire.

The call didn’t come soon enough for me, however. In January, there was an article that I really wanted to read. It also wasn’t one that I could unlock using the usual trick of going through Google News. I ended up renewing at the $260 (or so) per year regular rate. Actually, the regular rate is even higher than that, as I’ll get into further below.

Why Do You Want To Keep Overcharging Me?

Success for the WSJ, as I even noted in a later article explaining why that Google News trick had been deliberately blocked as part of a changing policy with the Wall Street Journal (see WSJ Pulls Back On What Google Searchers Can Read For Free). Restricting the content got me to renew, even at a higher price.

Success was short-lived, however. About two weeks ago, my phone rang. It was the WSJ (well, a telemarketer working for them) offering me a $100 per year deal. Did I want this? The rep was very eager for me to take it. So was I. Naturally, I signed up. At the very end, I asked what about that subscription I’d just renewed.

Much confusion then followed. I was told that I couldn’t have the offer, if I had a subscription already. I was puzzled. Surely the Wall Street Journal should know that I already had a subscription, right?

The telemarketer really didn’t care. She’s stumbled into an area that was clearly off the playbook, with a subscription that probably wouldn’t count to her quota, so simply wanted me off the phone. She told me I couldn’t have the deal, and that I’d need to call the Wall Street Journal directly to follow-up. Funny how quickly she went from being the Wall Street Journal to having nothing to do with them.

I hung in there. While we were talking, I looked up my account online. Here’s exactly what it said, except for me removing my account number:

See under “Status?” My account was shown as “Active” but with an expiration date of 2/23/2012, which at the time the telemarketer had called me had passed two months prior. I said that as far as I could tell, my subscription had expired two months ago.

That was enough for her, in the end, to declare she could let my subscription go through. A few days ago, I received a paper “renewal acknowledgement” of it. Actually, I received two. Going online today, one renewal was for the account I renewed in January. Another was for a “renewal” of the new account the telemarketer had created for me. For the past two weeks, the WSJ has maintained two different subscriptions for me, under the same exact name, at the same exact address. I’ve been double-dipped! And I’ve only gotten a single paper delivered each day!

Hey, I’m not complaining. I got a bargain on that second renewal. The WSJ can keep the extra $10 or so it made during my double-dip period. I called today, and my January subscription was cancelled. My “new” one is good through April of next year. I’m happy.

Really, You Want Me To Unsubscribe To Save?

Of course, I’d have been happier if I hadn’t gone through this in the first place. Why not offer me a reasonable price in the first place? Why train me to think it makes more sense for me to just cancel? I’ll get back to some answers on this, but let’s talk about the New York Times now.

Last March, I took the New York Times to task over its paywall. The pricing made little sense. It limited visits from search engines but not from social media for archaic reasons that seemed stupid. But I also signed-up for a subscription. I appreciate good journalism. The New York Times has some of that. I thought I’d show support with my pocketbook.

I enjoyed getting the paper each day, and the initial rate made it a good deal. I think I paid about $4 per week or around $200 per year.

Later that year, I realized my rate had doubled. Ah, yes. The introductory rate was only for the first 6 months. After that, there was an increase to around $400 per year.

That was too much. I already had the Wall Street Journal coming, along with the Los Angeles Times. I didn’t need the New York Times delivered as well. In fact, the main reason I was getting the print edition was because it was cheaper to do that for digital access than pay for ONLY digital access.

I called, to see if I could get a better rate, but I was told that was only possible if I let my subscription lapse. Yes, the New York Times would rather have me not read its paper for six months than to continue reading it and seeing all those overpriced print ads.

Please Come Back….

Fine, I let it lapse. Then about three weeks ago, the NYT emailed that it wanted me back. From what it sent:

Oooh! A special offer. That I was selected for unlike all those other suckers out there. Because I’m special. So special that I can 50% off the regular price of any digital package for 12 weeks:

Of course, when the special 12 week/three month rate expires, I’m right back to that regular rate that made me quit in the first place. Which may or may not be cheaper than if I didn’t take the offer.

The New York Times Subscription Pricing Matrix

To figure that out, I have to literally fire up a spreadsheet:

Oh dear, oh dear, what to do? What am I in the mood for? If I want to pay the least — and have no idea that I can simply tweet any article to myself to bypass the paywall — I guess I can shell out $195 per year for web and smartphone access.

If I’m really into reading through a tablet app, I can go up to $260. But darnation, what if I want to read on both my phone and tablet? The technology required to make that happen costs about $140 more. I need to pay $400.

At that rate, I might as well pay to have the damn paper delivered each weekday. If I do that, then I actually save $55 and get unlimited digital tossed in for free. That calls into question the value of the digital subscription. How on earth does the New York Times find it costs less to throw a physical paper on my doorstep each day than to sell me a pure digital subscription?

Again, I’ll get back to that. Meanwhile, the introductory offers are all confusing. Online, there’s a four week discount. The email offer I received gives me a 12 week discount. If you go print, you get a 12 week discount. Anyone thinking they wanted to do digital only, but who is really worried about the money, might be better off taking the 12 week print weekday+digital offer, then switching after that. You’ll save a lot over the additional two months.

Is your head hurting? Mine sure is, and I haven’t even mentioned that an email I got last year from the New York Times still works to give me a 26 week intro period on digital products.

The Wall Street Journal Subscription Pricing Matrix

Now let me go back to the Wall Street Journal. Compared to the New York Times, the pricing is a refreshing bit of simplicity. You can buy digital-only or print that includes digital access. There’s none of this smartphone versus tablet nonsense. No, the Wall Street Journal saves the nonsense for prices it pitches across different marketing channels:

Online, the WSJ pushes either digital or print+digital. By phone, it pitched print, as I’ve explained. Then there’s direct mail. Sitting on my desk are two separate offers, both sent to the same name (me) and to the same address that my existing subscription is registered to, enticing me to subscribe at an $11.99 per month rate:

That’s not an intro rate, either. It lasts as long as I act within five days. I’ll tuck these offers away. Somehow, I suspect in a year, I’ll find they’ll still work if I need to use them.

Of course, I probably won’t. In a year, my intro rate that the telemarketer gave me will expire. I’ll probably let the paper lapse again, then I’ll get a call, and, well, I think we know the score.

The Overpriced Digital Paywall

Let’s recap. Net neanderthals encouraged by Google to believe everything is free were so harming major papers like the Wall Street Journal with their worthless visits that we even had to have an FTC workshop/hearing to let Rupert and Arianna square-off about what’s fair.

Meanwhile, the New York Times finally unveiled its paywall last year just in time for publishers to start deciding that getting some of those ad views wasn’t so bad, so let’s leave a billion holes in the paywall, because heaven-forbid we don’t get traffic from places like Facebook or Twitter, when people complain about the paywall blocking them.

Let’s do all this and assume no one will figure out that we’re charging less for digital access, in some cases, even when we assume the physical costs of actually delivering a paper.

Our readers are intelligent enough to be told they must pay to support quality journalism but apparently not intelligent enough to figure out that it shouldn’t cost $55 less to have the New York Times delivered each weekday and get digital access versus digital-only access. Or that it shouldn’t cost only $88 per year more for the Wall Street Journal to have someone throw a paper on my doorstep six days a week versus just giving me a digital product.

Again, take in the numbers:

  • Cost of digital New York Times: $455
  • Cost of digital plus weekday delivery of New York Times: $55 LESS than digital
  • Cost of digital Wall Street Journal: $413
  • Cost of digital plus daily delivery of Wall Street Journal: only $88 more than digital

The Undervalued Digital Reader & Stupid “Circulation” Figures

The digital products are overpriced compared to the print products. That’s because, in all likelihood, a print subscriber is still stupidly deemed worth more to advertisers, even though I’d wager most of us ignore most of those print ads.

Heck, digital readers are so undervalued that the New York Times can count us up to four times, it seems. Buy a print subscription to the New York Times, and you’re counted once. But since you have a digital subscription, you’re also counted as a web subscriber, a tablet subscriber and a smartphone subscriber. From the New York Times about recent circulation figures:

Under audit rules, newspapers can count paid digital subscribers more than once if they have daily access to digital content on multiple platforms like mobile apps or tablets as part of a bundled subscription package.

Maybe I’m reading it wrong, but then again, it doesn’t matter. The circulation figures are an artifact from the past. They are a figure used by sales reps to convince advertisers how many people view their ads, as if those 800,000 print subscribers to the New York Times look at each and every print ad. Now another 800,000 digital subscribers can be added to the mix (many of whom might also be print subscribers), so the numbers get bigger but still mean little.

If you’re talking digital, you’re talking pageviews. And if you’re talking digital ads, then you know the exact impressions of those ads plus some sense of engagement by clickthrough or other metrics. So why count “digital circulation,” and what’s it really mean?

In the end, it makes lots of sense for newspapers to have a balanced model of ad revenue along with subscription income. Paywalls aren’t bad. I’ve run them myself. But what is bad is overcharging your digital subscribers in a way you’d never do to print ones, simply because you’ve overvalued the print ones for too long.


Comments

  1. David Josselyn says

    It’s been a train wreck in slow motion watching this happen to the newspaper industry. It bothers me particularly because working in the production department of a paper was my first job out of school, and while there, we launched its first website, starting it down this same path.

    Digital viewers are undervalued because the value of online advertising cannot be so easily misstated and exaggerated the way print advertising figures are. Once you take subscription rates, and then multiply by a pass-along factor, you’ve got what looks like a large audience, with no feedback to dispute you. For digital advertising, if you care more about clickthroughs than impressions, you know exactly what you’re getting and how much it is worth. It’s not really that digital ads are undervalued, it’s that print ads are overvalued– by a lot– and always have been.

  2. says

    If you install a second browser app on your iPad or computer and set it for private mode: it erase cookies at the end of each session. Chrome’s incognito Window does the same. Either option lets you read the NYT without limit. If you hit the 10 article limit in one session, restart the browser. Voilà, 10 more articles.

    I don’t advocate taking services and not paying, but on the other hand, nobody can require me to keep cookies on my computer for their convenience. NYT is trying to get it all ways: free search traffic to drive ad revenue, and tricking people to buy subscriptions via a teaser offer that shows a low monthly price and then quotes am exorbitant weekly price in the fine print.

  3. says

    As a former newspaper editor (what’s up, Gannett empire?) turned Internet marketer, it’s really excruciating to watch from the other side as the news industry totally implodes, 95% due to its own ineptitude and willingness to bury its head in the sand when it comes to stuff like this. There are still tons of smart and savvy news gatherers out there, but processes like the frustration you describe above keep their efforts from getting the due they deserve. Sad.

  4. says

    Very well done article, Danny. You should consider reposting it on SE Land so it will get a broader audience.

    It’s really a shame that WSJ and NYT “don’t get it.” I dropped my online WSJ subscription close to 5 years ago, after being double-billed (at the time it was worth $110 to me but not $220), and after convincing myself that they really offered very little that I couldn’t get elsewhere (generally for free).

    I still read the occasional WSJ article that someone like Tim O’Reilly or yourself links to from Twitter, and the same with NYT linked articles, and I’d really like to support them in some way because those articles are generally very well-done. But the current subscription model drives me away.

  5. says

    I always wondered how much does it cost the NYT or WSJ to acquire one digital sub. Some figures (including the cost of the paywall technology and marketing) suggest that it might be way over $100.

  6. Adam Goldberg says

    I subscribe to The Washington Post, Sunday-only. It turns out, during the weekend is the only time I actually have time to sit down with a cup of coffee and read news printed on dead trees.

    About once each week, the telephone rings — a telemarketer calling on behalf of The Post telling me that because I’m “such a valued subscriber” they’ll be happy to deliver dead trees to me Monday through Saturday for $0.00. “No thank you,” I’ll say to which the response is “huh? It’s free. Not a trial offer. Free.”

    I suppose this is somewhat different than the article, but yet another symptom or artifact of the print newspaper business doing strange things (as it circles the bowl on its way down).

  7. JotKali says

    Great article Danny. I’ve got the same spreadsheet running trying to figure out which subscription I should choose. Here is what I simply don’t understand. I can *google* what the current deals on subscriptions are, so if NYTimes tells me a subscription cost $260 a year, it takes me 2 seconds to find out that others are paying $120 a year. That makes me feel ripped off. The wackadoodle per device price structure also doesn’t make sense. Its as if a committee of old clueless folk are sitting around trying to shoehorn the paper boy model of selling subscriptions to the digital age.

    Instead of actively wanting me to subscribe, the actions of the NYT wants to make me *not* subscribe. What kind of customer acquisition model is that ? How about 10 bucks a month, my family and I get to access the NYT digitally how we see fit. Otherwise I’ll select my second choice, which is not to subscribe. My second choice definitely is not trying to navigate through the paywall maze so I don’t feel ripped off.

  8. Sam Docker says

    Great article, I’m always baffled by newspapers online, they just don’t seem to get it right. I’m sure it won’t be long before someone cracks it.

  9. bkd69 says

    What baffles me is why newspapers can’t see moving their paying subscribers to digital services should be their priority. They should be doing more deals like the NYT earlier this year, where they offered a nook+subscription at a not unreasonable price, if you weren’t already a subscriber, or didn’t already own a nook.

    The other point they miss, is that they’re sticking the wrong part of their papers behind the paywall. Your articles are not worth paying for. What people *will* pay for on the internet is interactivity (90′s buzzword bingo alert). Eliminate the open comments, which are useless in a widely read publication anyway, and offer your subscribers forums instead. Offer live chats with noted columnists and editors. Maybe cherry pick selected comments from the forums to the open article page.

    People who are paying you money are happy to give you feedback, and limiting it to paying customers helps keep the riff raff out.

    I can’t guarantee that this will save your newspaper, but it’s a step in the right direction.

  10. says

    Excellent summary of why I paid to have the weekend papers delivered to a friend’s address in New York so I could have NYT all access at home (in Germany) since at the time it was cheaper than digital only. The papers ended up, unread, in the trash. I’ve since let the subscription slip but am being tempted by the offers you’ve listed above…I guess we’re both special customers :)

  11. paul says

    Baffling…

    I like Sean Sinico’s idea of sending the physical papers elsewhere (your local library or school, perhaps?).

    I had the idea a few years ago (not independently, it turns out*) of using the infinite ad inventory of the internet, along with user subscription/registration, to try and squeeze some value out of advertising. I have no idea of it worked for them or if it would work for others but these media companies must realize that the internet offers some advantages they can use, even as it chips away at their physical artifact-based business model.

    * http://www.paulbeard.org/wordpress/2009/03/18/wonder-if-i-can-bill-mcclatchy/

  12. Andy says

    I quit the WSJ some time ago, I keep hanging in there on the NYTimes even though you’re quite right — the pricing is insane. (Try getting a receipt to expense it; it’s buried somewhere in the “Your Account” section of the site, but you have to have serious coding skills to find it. It’s under “Account History” btw and I had to use other software to generate an image of it.)

    Hey NYTimes, ever heard of emailing a receipt to someone like modern companies started doing in the early 2000s?

  13. kw says

    RE: Economist – you can get cheaper subscriptions depending on where you say you are reading the magazine. Tired of the games but will play them if it saves some money.

  14. bkd69 says

    Cheaper still for the Economist:
    Download and install Calibre:
    http://calibre-ebook.com/
    Click the little down arrow next to the big ‘Fetch News’ button in the tool bar.
    Select ‘Schedule News Download’ from the resulting menu
    Type ‘economist’ into the search window, and it’ll show the script (they call it a recipe, but they’re written in Python) offerings for downloading The Economist’s RSS feed.

    Poke around in there to configure scheduling and retention and formatting policies to your liking, but they update weekly, and it’s as near a complete version of the magazine as I can tell, though I’m not a reader of the print edition, to be able to say for sure.

    The short of it is that Calibre will grab the RSS feed, and format it to an ebook format of your choosing. You can schedule downloads for daily or weekly, though you have to leave Calibre running to do that or schedule it, or run it as a service, or what have you. There’s a bunch of other scripts for other newsfeeds as well, including the NYT, but that requires a password which I haven’t set up from my subscription yet. The Economist is one of the better working ones, bringing down the cover as well as the contents.

    Who else remembers AvantGo?

  15. HH says

    Good analysis. I unfortunately do what one of your readers suggested – delete cookies just renew my NYT access. I have sent them countless emails pleading with them to change their pricing policy to something more rational. I even explain to them that I read for free. If they would change, I would gladly pay. My recommendation to them was to bundle subscriptions. If I want to read NYT, WSJ and say, the Economist, charge bundle that in way that makes me pay more than what NYT is charging, but much less than the three. I would gladly do that.
    Anyway, my guess is that they could double their subscription rate with a sensible strategy.
    HH

  16. says

    Great Article.
    I’ve been frustrated with this kind of attitude for years and believe we’re likely to see a full repeat of it with streaming Media.

    This is well stated in the “Take my Money HBO” campaign. Highlighting how media companies are just so backwards…If all reports are correct, better pricing would significantly increase HBO revenue… (and reduce piracy no doubt)

    I have always been a fan of transparent pricing and generally believe its the best approach. As a long time Marketer (Digital) I’ve recently taken a strong interest in Economics.

    One of the things I’ve been looking into is theories of asymmetric information and price discrimination. This article featuring JC Penney “fair and square pricing won’t work” highlights some real world issues for business’s not “trying to rip you off”.

    I’d be interested in the numbers/details in the newspaper examples above – i.e what’s the a$10 double dipping worth to them as an aggregate? and how many people accidentally continue the subscription etc..

    Its disappointing if this is really the world where deliberate mis-information is the best way to maximize profits.

  17. Reid says

    What really pisses me off about the New York Times is that, if you pay for All Digital Access, they *double charge* you for the web access portion. Notice how the “All Digital Access” price is precisely the same cost as “Web + Tablet” and “Web + Smartphone”? Yeah.

    I’ve told them repeatedly, asked via twitter, emailed and called customer service, and nobody is interested in giving me an answer. Nobody is interested in understanding that they’re insulting their customers when they give them the finger and ask them to pay for, effectively, a second subscription because they want to read their web + tablet subscription on their phone, which has a smaller screen than EITHER. Most businesses give discounts for buying more services. This is the only one I’m aware of that actually jacks the price up with the more you buy.

    I simply don’t care about introductory offers.

    I don’t even really care what the total bill is. I’d like to subscribe to the NYTimes. I just don’t want to be insulted. (nor do I want to scrape a dead-tree edition off of my doorstep every morning and drop it in the recycling without reading it; been there, done that.)

  18. says

    I am reading nytimes since 2008 but i never subscribe it. I am not a regular newspaper reader so me it is okay to read it for free. I want to know how it make a difference to subscribe it for a common person like me.