Prepare for Digital Commerce 3.0 by stress-testing existing models


Digital Commerce 1.0 reigned when digital paywalls were seen as the purview of targeted business publications like The Wall Street Journal or The Financial Times.

With iTunes, mobile devices, and the success of The New York Times paywall, 2010 and 2011 heralded Digital Commerce 2.0, in which general news publications enjoyed the benefits of charging for digital content.

Surprisingly, consumers enjoy the benefits, as well, and respond favourably to “bundled” pricing, addressing the consumer need to get information across multiple platforms and devices over the course of the day.

Version 3.0 is right around the corner, with consumer and media preferences shifting rapidly among the Web, apps, and mobile devices, as well as the growing role of video and smart TVs.

In addition to these platform game-changers, newspapers already in the paywall game and those just on the verge need to perform continuous check-ups — to determine if the market or their readers have changed and warrant a new approach to their product offerings or pricing framework.

  • How do readers use and value a newspaper’s content across print and digital platforms? Has either changed? How can consumer insights inform a newspaper’s product road map? A steady regimen of audience research, particularly qualitative, one-on-one interviews, will allow publishers to understand how content preferences and use are changing, or not. Since value and the lack of easy substitution are the crux of a paywall, like all consumer products, newspapers need to invest and improve their content and its presentation to ensure these attributes are strong. 

  • Has demand for a publication’s content across digital platforms changed? Has the willingness to pay changed in a market based on competitive offerings or new product innovations? Over the past four years weve seen a shift in willingness to pay. Until 2010, willingness to pay for digital content was seen as a narrow opportunity. Since then, though, we see there is a large segment of the digital audience not just willing, but eager to pay for content when it is offered up on devices and in applications/formats that are compelling, intriguing, efficient, and useful. As newspapers improve digital product offerings along these dimensions, willingness to pay and the pricing thresholds will likely improve over time, as well.

  • What payment style is in vogue at the moment? Has it changed? Is a newspaper’s pricing model still supporting its objectives (i.e., maximising revenue or optimising reader participation)? Have the market and products changed enough for a pricing framework to optimise both? The current approach seems to be one-stop shopping — single payment for all devices. But as newspapers expand across video and provide content on new devices like smart TVs, a single bundle payment model could leave money on the table, or the price point could exclude more occasional or segmented readers.

Now is the time to stress-test existing models and hypotheses. Disciplined discovery and understanding of inter-dependencies among these questions will help newspapers prepare for Digital Commerce Version 3.0.

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