Wednesday, June 30, 2010

FairPay for The Times?...for JournalismOnline newspapers?...or Google Newspass?

Newspapers feel they must charge for Web content or go under. My radical new FairPay pricing process could provide an important tool for doing that.

Major players are moving from free to freemium combinations of limited free access (to some small number of articles per month), with a "pay wall" requiring paid subscriptions for more access. The New York Times has committed to this (as nicely described by David Carr), and News Corp recently bought into Journalism Online, which is building a similar platform for other newspapers. Most recently, reports are that Google will jump into this game as well, with a similar platform called Newspass.

Clearly this could be a wrenching change, and reflecting that, talk has shifted in nuance from the rigidity of a "pay wall" to the idea of "dialing" pricing policy into a "metering" system that can be adjusted to market conditions.

FairPay puts the objective of flexibility on steroids, by shifting toward a Pay What You Want model that give readers more control, while still giving publishers the last word (over time). How can that be? FairPay develops a buyer reputation for payment, based on direct feedback on pricing, to a dynamically adaptive hybrid of free and paid content. My article on FairPay explains this radical "Fair Pay What You Want" pricing process in some depth.

Here are some comments relating to this class of newspaper models and how FairPay could be used as a complement to their metered offering (as suggested in this diagram).

How it works:
1. Selectively offer to let the reader set any price he considers fair after each month of subscription (Pay What You Want, post-sale).
2. Let the publisher track that price and use that information to determine whether to make further offers of that kind (FairPay renewals) to that buyer in the future.
Those who pay fairly, rise above the pay wall -- those who do not, must face it.

First, an experimental program might be offered to a selection of readers based on FairPay pricing. This might be aimed at regular users on the following terms:
  • Unlimited access is offered on a month-by-month basis upon subscription.
  • Before the start of the next month, the user decides on a FairPay price to pay for the current month (with a usage report provided to the user for reference).
  • Depending on the FairPay price set by the user, the publisher decides whether the subscription offer will or will not be extended for the next month.
  • By coexisting with the paid subscription model, users will have a reference price, and the usage report might indicate how their usage compares to averages (and to the standard number of free articles).
Once tested, this FairPay subscription plan might be enhanced and offered more broadly, with more varied levels of service:
  • Price setting might gradually be reduced to a quarterly or yearly cycle for established subscribers with good FairPay reputations, easing the hassle of price setting, and extending "FairPay credit."
  • Usage reports would be provided to assist in the pricing reviews.
  • Payments might be monthly (even if price setting is yearly), for better cash flow and flexibility.
  • The options offered to any user on each renewal/pricing cycle could be adjusted based on their payment history (with consideration of any relevant circumstances known or reported). Those who pay better than average might get added rewards, and those who pay less might get less.
Thus those who pay fairly get increasing levels of trust and other rewards, and float above the pay wall, but those who do not get kicked back down into the pay wall.

This benefits both the publisher, and readers:
  • Users feel more respected and empowered by the added trust and flexibility.
  • Some will pay less than the standard subscription rate, but some will pay more.
  • Relating pricing to usage might help get heavy viewers to pay more, compensating for those who pay (and/or use) less.
  • Many who might refuse the conventional subscription service might be willing to pay something reasonable for a FairPay service -- added revenue to the publisher.
  • The details of the offers and the process can be individually and dynamically tuned to encourage good payment levels, and to send free-riders back into the hard pay wall of the standard plan.
Bottom line:
  • an even more nuanced and individually set dial that give readers some say in pricing, but leaves ultimate control with the publisher.
  • more happy users, plus more revenue to the newspaper to support quality journalism.
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A rough sample of how a FairPay offer might be presented to subscribers is on the FairPay Web site, along with an FAQ and other details.

2 comments:

  1. Richard
    Have you heard of Znak it!? www.znakit.com

    ReplyDelete
  2. If I understand correctly, Znak It! offers a combination of conventional monetization methods (set-price, virtual currency/points, ads) and has some seller-determined dynamic pricing capabilities, but lacks the key features of FairPay -- buyer freedom to pay what you think fair, combined with seller tracking and gating of future offers to incentivise buyers to pay fairly.

    Thus it does not solve the critical problem of widely varying value/price sensitivity and fear of buyer remorse -- that is the problem that only FairPay can solve.

    ReplyDelete