3 content pricing models from the future
The year is 2020 and I’m about to make a digital content purchase. It’s amazing how much the industry has evolved in the past five years. For example, pricing is no longer a one-size-fits-all, take-it-or-leave-it component. I now have multiple pricing models to choose from:
Social bulk discounts – That digital newspaper subscription I’m considering offers a 50% discount if I can get at least 30 of my social network friends to subscribe as well. Yes, the Groupon model is still alive but with a twist. In order to take advantage of the deal I first need to rally commitments from my friends. If successful, all the participants are also committing to broadcast their purchase via Facebook, Twitter or whatever other social network they opted in with.
Advertising-subsidies – It finally happened and publishing purists are still complaining about it. Meanwhile, the rest of us are thrilled to choose from two different options and price-points when we buy ebooks. Those who prefer the traditional ad-free approach pay full price while others pay less and are presented with ads as they read the book. Even deeper discounts are offered to consumers who agree to share their name and email address with sponsors and advertisers. I’ve completely embraced the ad-subsidized approach and find the same as reading a magazine or newspaper.
Clubs – Ever wonder what happened to the old record and book clubs of yesteryear? They’re back in the digital world. I get to choose from 3 deeply discounted ebooks to open my account and then I commit to paying full price for at least 10 additional ebooks over the next 12 months. If I fall short of that commitment my credit card gets hit with a penalty charge at the end of the term, so better to just buy all the books I want rather than pay a fine with nothing to show for it.
I hope you agree that tomorrow’s pricing models are terrific for consumers. The data and buying commitments ought to be good for publishers and retailers too, right?
You probably quickly surmised that Amazon isn’t a fan of any of these, mostly because they want to own all the data and sell it to publishers. That’s OK though because all the other retailers recognized the benefits and now offer all three models. Publishers are also using them in their direct-to-consumer efforts on their websites. As a result, the retailer playing field has been leveled a bit, benefiting both consumers and publishers.
Rest assured, the future is bright (but the Cubs still haven’t managed to win a World Series).
I am a little confused with the club model, what is the unique selling point in digital era? cheap prices? abundant choices? or something else.
Posted by: Yuying | July 28, 2015 at 11:06 PM
The options are only limited by the imagination. I could see clubs offering bonus content that might not be found elsewhere, maybe going so far as to offer exclusive editions. Another option would be earlier access to certain titles. Again, there are a lot of different options that could be leveraged with a club model.
Posted by: Joe Wikert | July 29, 2015 at 09:20 AM
Great content Joe - I've shared it on twitter. I wonder though, do you think the day will come when authors refuse to give away their content and distributors like amazon will have to pay for the entire content pipe that they deliver to readers?
Posted by: @Alex_Abaz | August 15, 2015 at 04:08 PM
Hi Alex. I'm not sure I understand your question. Are you asking if authors will revolt against Amazon? If so, I'd have a very hard time envisioning that scenario.
Posted by: Joe Wikert | August 16, 2015 at 11:53 AM