Sunday, May 22, 2011

A really good question

And a good one to give on an economics exam.

Why don’t the Wall Street Journal and New York Times combine paywalls? Anyone already subscribing to both newspapers would suddenly find herself paying much less. But it’s hard to imagine that in practice, the overlap is really so large: maybe 20% at most. And over the course of a year or two, there would be a much larger effect from increased demand. After all, subscribing to two leading newspapers for the price of one would be a really great deal, one that consumers would be happy to exploit. This arrangement would be likely to increase online revenue, possibly by a substantial amount.
The author, Matt Rognlie, goes on to tackle the question of how the two papers would share the revenue.


Blogger Megan Knight said...

The simple answer: because nobody who knows anything about Rupert Murdoch's business practices even contemplates thinking about making a deal with News Corp.

The more complex answer is that newspaper loyalty is a complicated matter, and nobody really knows how far it goes, and how far things like expedience go. When we start to see realistic data on how the various paywalls (including the NYT's dog's breakfast of a paywall), tablet and phone apps, and assorted other deals, plans and schemes play out, everyone's being conservative about the whole thing.

2:56 AM  
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