Market Based Pricing, the approach developed by Mather Economics to apply yield management principles in the Newspaper industry, is described in the April 2009 issue of Presstime magazine. The article by John Heys appears on page 38, and it includes quotes from circulation personnel at two newspapers currently using Market Based Pricing to increase home delivery renewal prices strategically. Both papers have been able to raise home delivery circulation revenue with minimal incremental stops due to price. If you would like more information on Market Based Pricing, please contact viagra Lindsay at 770-993-4111.
Archive for the ‘Pricing’ Category
Price Points
Friday, May 15th, 2009Micropayments mentioned in Editor & Publisher
Friday, May 15th, 2009Matt Lindsay is quoted in an article by Jennifer Saba in the April 2009 Editor & Publisher regarding his thoughts on the potential for micropayments to help newspapers monetize online content. “I think there are a lot of people willing to pay [for online content]“, he says. “They just need a vehicle for doing it.” The article does a good job of covering the differing opinions in the industry regarding micropayments. The people that are opposed seem to believe that micropayments would be used exclusively as a method for payments. Mather Economics believes that micropayments are valuable as one of several payment options that should be available for customers. We believe it is likely most revenue would come from subscription payments, but customers should be able to buy individual pieces of content. Just as iTunes unbundling of albums into individual songs as increased the amount of music sold, unbundling newspapers will increase the amount of online content sold.
Online content pricing
Monday, March 16th, 2009Mather Economics has been researching business model and techonological barriers to online content pricing. Our newspaper clients have frequently asked us about this source of revenue, and we have put together a set of critical factors that would determine viability of an online revenue source. This research effort has led us to develop Haymaker, a proposed method of charging for online content that reflects the successes of online content pricing while avoiding many of the problems of prior efforts. We have spoken about Haymaker with several newspaper companies, and we continue to refine the Haymaker product with input from advertising executives, technology companies, and newspaper industry veterans.
Speaking at NAA annual meeting
Monday, March 16th, 2009Matt Lindsay will be speaking at the NAA annual meeting in San Diego on April 7th. Matt’s presentation will cover his work with newspapers in the areas of circulation pricing strategy and customer profitability analysis. A white paper that summarizes these topics has been published by the NAA on their website.
Customer profitability analysis is an opportunity for newspapers to understand where they are making money from their home delivery circulation and where they are losing money chasing unprofitable customers. Using data on preprint insert contracts, delivery costs, and production costs, in addition to their circulation revenue, it is possible to measure operating margin by customer. As is true in every business, there are some customers that are unprofitable to serve due to their high cost to serve, low willingness to pay, and low value to advertisers.
As the business model for print newspapers evolves, the reach of newspapers into high-income and highly educated households provides an opportunity for significant revenue from preprint advertising. This is one bright spot in an advertising market that is more competitive by the day. When we study preprint advertising for newspapers, we find that the variation in preprint advertising across the market can vary dramatically due to partial-run insert contracts. Knowledge of which customers draw significant advertising revenue from preprints enables newspaper circulation departments to focus their resources on acquisition and retention of those customers.
