Friday, June 6, 2014

Times Premier? [/Insider?] -- What is it really worth? ...FairPay can tell

The recently introduced Times Premier premium subscription service provides a nice case study of the problems with conventional pricing models for digital content, and how the more adaptive model of FairPay promises to do much better.

[Update 1: Apparently Times Premier did not meet objectives and was re-introduced in 2015 as Times Insider. The differences seem insignificant with regard to the points made here.  
Update 2: Apparently Times Insider fared no better as a one-size-fits-all premium service, and the program lives on only if the form of Times Insider stories that are included in the standard offering.  For the reasons I explain here, maybe they should consider FairPay, or simpler, but related "risk free" post-pricing / post-bundling models.]

"For those with a curiosity that matches our own," the Times' pitch reads, but what I am most curious about is whether and how I would value it. ...And whether the value to me would be consistent, or highly variable and hard to predict.

The Times' metered paywall has been working better than many feared, but is obviously leaving money on the table from loyal, engaged readers who can and would pay more for Times' journalism and extras.

Premier attempts to capture that value, but, like the old "Godfather"-inspired joke, they have made me an offer I cannot understand.
  • It offers me a combination of new features, some in specific quantities.
  • I don't know what these are, have never seen many of them, have no idea if I will like them. And, even if I do like some of them, how many will I want in any given 4-week cycle?
  • Some sound interesting, and some not at all
  • Even after I have tried them, I expect my desire and opportunity to enjoy them will vary and might decrease over time
  • I may want more than the included number of some features, while having no interest in others
I can afford the extra $10 per 4 weeks cost,* but have no confidence I will value the service.
  • Maybe I might try it and, if not too disappointed, just continue to pay the $10 without much thought (as the Times might hope) -- but profiting from my inattention leaves me feeling exploited.
  • Alternatively I might try it for a while, then cancel -- even if I would be willing to pay something for the occasional feature -- leaving both me and the Times losers.
  • In any case, I feel little temptation to even bother -- again leaving both me and the Times losers.
The core problem is a rigid, one-size-fits-all pricing scheme for a time- and quantity-varying experience good that is offered to diverse buyers with different and time-varying needs.

I had previously suggested to the Times that FairPay offers a new adaptive strategy that is far more promising. As explained further elsewhere in this blog, this is how it might work:
  • The Times identifies me as a current digital and print subscriber, and offers to let me try Premier on a FairPay basis, as a "patron" of their quality journalism.
  • They "bill" me in arrears on a pay what you want basis, telling me for the past 4 weeks how much of each Premier feature I used, and advising me of a suggested price based on that usage and my history. The suggested price may reflect volume discounts and a maximum for "unlimited" use, and may have adjustments for students, disadvantaged, or affluent patrons.
  • They try to nudge me to pay well by reminding me of their quality journalism, telling me that others are paying much as they suggest, and offering added incentives.
  • I decide whether I think it is fair to pay as suggested, higher, or lower, and check off possible reasons for that. 
  • The Times weighs the reasons, considers my history, demographics, and usage, and decides how fair my price seems -- on an individualized basis.
  • After a period of probation, the Times decides whether to continue as is, bump me up to more privileged offers, or drop me from FairPay pricing and require that I pay the standard $10 per cycle if I want to continue Premier.
  • This dynamic adaptation continues indefinitely, as the product and the relationship change and evolve.
This has a number of benefits to both me and the Times:
  • It builds a true patronship relationship where I feel empowered, participate in real dialog about what I do or do not value, and build on my experience with the Times and my reputation for fairness.
  • It encourages me to recognize the value of what I get from the Times, and to reward them accordingly.
  • It lets me try Premier at no risk, but (optionally for the Times) with the understanding I am expected to pay, even for the first 4 weeks, if I find value in it.
  • Each cycle, I can pay as suggested based on my usage -- or more or less -- as I wish. 
  • If I have an occasional heavy usage cycle, I can apply whatever "volume discount" I like to avoid an unduly high charge, as long as I don't abuse that privilege.
  • If I thought the features were especially good that cycle, I can pay a bit more, and increase my fairness rating to show my "patronship" -- and earn more priviliges.
  • If I thought the features less good that cycle, I can pay less, and only harm my reputation and privilges if I make a habit of devaluing the product.
Some of the key benefits to The Times
  • They can get far more people to try Premier, and retain far more, for wider market reach and greater profit. Many may pay less than the standard $10, but some may pay more, generally in line with the value they receive.  The net profit can be higher, with a lower average price, but from more patrons.
  • Since Premier is a new offering, they would not risk cannibalizing existing revenues.  Even after it is new, an added FairPay option could extend its reach down-market, and add more premium revenue up-market.
  • They can build a deeper relationship with their patroms, based on this deeper empowerment, dialog, and experience. 
  • That can shift the relationship with the Times from quid-pro-quo business exchange norms to cooperative, communal norms, and fosters social values of fairness and reciprocity, both of which increase willingness to pay.
  • They can learn far more about what their patrons value and why.
  • They can justify different prices to patrons with different value propositions and abilities to pay.
  • They can start with fairly simple decision rules and liberal continuation criteria, and gradually add more nuance and discrimination as they and their patrons gain experience with the process.
Trying a radically new approach like FairPay has risks, and takes some effort, but I suggest that a FairPay version of Times Premier offers far more profit potential and far better relationships with the Times' patrons than the conventional version. Time will tell.

[UPDATE:]  I did try Times Premier, and cancelled after the four week trial. As I feared, the value of offers was very episodic, and a constant subscription price makes no sense when my usage and value varied widely from week to week or month to month (much of the time low). The insider features at the time were not of great interest to me (the David Carr item that was of interest came up weeks after I cancelled). The free e-books were only specific titles that were not the ones I would have been interested in. If I could have run-of-the-house access, and pay commensurate with what I actually found interest in (as FairPay would permit), I would have been very willing to be a patron. As far as I can tell, not very many others have found this offer attractive, and readers I have talked to about it saw little appeal.

[UPDATE 11/18:] I since subscribed to the re-launched Times Insider, mainly to see what they were doing. I have gotten very little value from it, but did not cancel out of professional curiosity. However, on checking on 11/28/18, it seems they no longer sell this as a premium feature, even though some items are still identified by that name. I seem to no longer be billed separately, and have not gotten a "Times Insider" newsletter since 3/18/18 (which I had not noticed until now). Apparently few saw a viable value proposition here, at least not as offered. What I proposed might have worked better...

*My print insert offer says $10, but the Web page says $11.25. The print insert offers a free 4 week trial, but the Web page asks for $0.99.  Seller pricing manipulations that are hardly endearing to patrons!


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