Reaching New Audiences
Maintaining your current customer base is critical to any business, but the number of existing customers is generally a fraction of the total potential base. We're somewhere in the midst of an inflection point in the content business. This is a stage where existing models are challenged, new ones are created, leaders can be toppled and the proverbial "guy in a garage" can completely reinvent things. So why are so many publishers trying to apply all the old rules? Here are a few examples:
Magazines at $4.99 an issue. This one's just too easy to pick on. Are you kidding me? The product is nothing more than a quick-and-dirty print-to-e conversion. Were these guys not paying attention to the book industry when they saw nobody could sell their quickie p-to-e books at the print price? Curiosity is driving some sales now, but that's not a long-term strategy. Look at some of the comments about Time's app:
Only $260/year to get content freely available on the web or delivered to your door in print for a fifth of that. Idiots.
If each issue was a dollar I'm sure more people would buy this mag. $5 is silly.
Time notes that they're only selling single issues right now and that a subscription model is coming. Fine, but in the mean time how about doing something more creative? If not a dollar an issue how about giving me the last 5 issues for $5. Just because you can sell print copies at a newsstand for $5 each doesn't mean you should charge the same for single digital issues, especially when there's little to no value added.
I really want these guys to succeed and I'm more than willing to pay a reasonable amount for an issue or a subscription. They should use this opportunity to come up with models that help them reach new customers, not just squeeze the early adopters because they know they have more disposable income.
P.S. -- It seems so obvious but I can't help think these guys have forgotten that they make a good deal of money on advertising, so if they go with lower prices and expand their audience they'll increase their reach...without the cost of printing and mailing.
Newspapers are still asleep at the wheel. The New York Times seems afraid to commit. Their Editor's Choice iPad app is OK but it's more of a teaser than a viable, long-term product strategy. As I mentioned in this earlier post, these guys are just training me to find workarounds to get the content I want. And although I'd love to pay for a subscription they don't even offer one.
USA Today is doing a better job but only going half way to a total solution. Their iPad app is nice and it's even free. I only read USA Today when I'm on the road but I'm starting to read it more thanks to this app. That said, they need a model that pushes the content to me every day, not one that forces me to open the app for updates. Go ahead and charge...it's OK!
My local newspaper is more typical of the larger problem though. We've been paying subscribers for almost 20 years and every month we're one step closer to canceling. Want to know how they could keep me on board? Offer an iPad app version of the paper for free with my print subscription. And please, make sure it includes every bit of content that's in the print version.
The focus there is on customer retention, not reaching new ones. To solve that problem, how about forging alliances with other newspapers so that the app provides much broader access? So if I'm heading to Seattle today I can open my app on the flight west to catch up on all the local news. Sure, you can accomplish all this in a browser for free...if you're willing to grab the pages in advance. But we're talking about convenience, which often comes at a price. And don't forget about the additional advertising reach for all those non-subscribers today who could become customers tomorrow.
Lemmings waiting for the next channel to open. Why does it seem like publishers are all sitting around waiting for channel equilibrium to happen on its own? I have two words for everyone: Go direct! Sure, you'll want your products in iTunes, the iBookstore, etc., but why is everyone so leery of creating a direct relationship with their customers? Yes, some existing accounts will complain, but if you're not building a direct strategy you'll lose in the long run. Despite Apple's "closed" model it's remarkably easy to add epub books bought elsewhere to your iBooks library. And look at Amazon. Even though they have a Kindle app for the iPad, any purchases you make for it are untouched (and untaxed) by Apple. Why wouldn't you want to capture 100% of the transaction by building a direct channel, especially since the choices aren't mutually exclusive? The more storefronts your products are in, including a storefront of your own, the better!
Here's an example of how we should all be thinking: The Elements, from Touch Press. Why would a tightwad like me spend $14 on a subject I dreaded in high school and has nothing to do with my job or personal interests? Because it encourages discovery. I don't know the difference between Dysprosium and Holmium but this crazy app makes me want to learn more about both. So while most chemistry publishers would have done quick-and-dirty p-to-e conversions, these guys took the time to make the topic fun and interesting. As a result, they're reaching far more new customers than a dusty old periodic table ever would have.
So if the periodic table can be completely rethought to encourage discovery and reach a totally new audience, what about the topics you specialize in? How can The Elements inspire you to approach your business differently?
You bring up some great points. Content providers are stuck trying to use the same old business methods (methods that are hardly working great to begin with, I might add), and applying it to the digital realm. Why would I pay $5 for a digital movie download, when I can get it from Redbox for $1? Why is the WSJ $3.99/week on the iPad when I can get a print subscription (with all the costs of print) for only $2.99/week? It makes no sense.
I actually wrote a similar blog post last month talking about a lot of these same issues, if you're interested.
Posted by: David Derrico | May 10, 2010 at 04:18 PM
You are so right about pricing.
Posted by: Ed Renehan | May 11, 2010 at 12:01 PM
I think you forgot one of the oldest ways to advertise your business. Promotional products have been around since the 1800's and started with match books with business names imprinted on the boxes.
Here is what Harvard has to say about promotional products.
According to a survey printed in Harvard Business Review: Only 25% of people remember seeing an ad on TV or in the newspaper the day after seeing it. On the other hand, 39% of people surveyed were able to recall the donor of a free gift six months after receiving it, 74% were still using the gift, and 70% had purchased goods or services from the giving firm.
Posted by: Buzz Hill | March 18, 2012 at 04:50 AM