Target has bargain bins at the front of the store where they sell stuff for $1. As you read the phrase “stuff for $1”, did it trigger an impression of what you would expect to find there? Probably “cheap”, “kitschy” or maybe “disposable”. In the best case, maybe a fun indulgence.
Yesterday I picked through those bins to see how long it would take me to part with a dollar. I passed by the Hello Kitty earbuds, the doodle pads, the various party favors, and the small tubes of crazy glue, before tossing a pack of dinosaur flash cards into my basket. They struck me as more of a fun indulgence rather than cheap, kitschy or disposable. Plus, I learned the flying ones are now called “pteranodons” and not “pterodactyls”.
At no point, however, did words or phrases such as “award-winning”, “premium”, or “unparalleled” enter my mind.
Go online, however, and that single dollar seems subject to a strange exchange rate effect.
One dollar is roughly the price for one day of full-blown, all-access subscriptions to the Financial Times ($8.99 per week), The Wall Street Journal ($24.99 per month), and The New York Times ($8.75 per week). The introductory offers are even cheaper, especially for The New York Times alone. The NYT pitches you “the world’s finest journalism” with “uncompromised integrity and unrivaled courage”. You also get “the most compelling opinion pieces anywhere, all in one place, curated by our editors.” And an app, too!
Yes, as a new three-month subscriber you can get all of that for the equivalent of a small box of crayons, a doodle pad, two sets of Hello Kitty earbuds, and that pack of dinosaur flash cards. That works out to six cents per day!
Is “cheap” even worse than “free”?
Six cents a day creates a category below cheap. You tossed more in the tip jar when you bought coffee this morning. You probably noticed at least that much in lost change on the sidewalk on your way to your office. But online, that’s what they are charging for a premium paper.
This assault on value raises several questions which cry out for resolution and which apply to all media, not just newspapers. Do the prices we see really reflect the maximum value we are willing to place on premium information? Why is this high-octane fuel for our minds so much cheaper – orders of magnitude cheaper – than the fuel for our cars or for our bodies? Why do publishers charge so little for content they clearly prize so dearly?
At work here is an anchor effect rooted in the past, and a value misperception that distorts the present. The old newspaper industry set artificially low prices for its physical products because its huge advertising revenues subsidized its production and distribution costs. We as readers never learned to place value on the content itself.
The value misperception the industry fights today is that insidious mantra: “Information wants to be free”. Yet the same smart person (purportedly Stewart Brand, once the editor of Whole Earth Catalog) who uttered that line also said that “information wants to be expensive, because it is so valuable.” Lower costs vs. higher value. That is the paradox of content.
It’s about value, not just cost
The cost side of that paradox hogs all the attention. Just witness the current war between Amazon and Hachette.
Yes, online distribution costs are lower than for physical media. Yes, it is reasonable to expect consumers to share in that. But that line of thinking ignores the value side of the paradox. The relentless repetition of the cost story has overwhelmed any attempts to create a better value story.
Be honest: is a digital version of the newspapers mentioned above more valuable – more useful, timely, convenient, practical, deeper, and broader – than that old, costly ink-and-paper version full of yesterday's news? Does the digital version enable you to be better informed and do your own job better? If so, why should publishers charge less for that far superior product? Put another way: would you be willing to pay more if you had to go back exclusively to ink and paper and gave up digital?
What needs to change
Resolving the paradox of content won’t happen until those with an interest in building a sustainable, profitable media industry start telling a better value story. Content prices cannot find their optimal levels – in line with their value – until the value perception changes.
That effort will require better comparisons to help readers and listeners put value into context, to pull us out of the bargain bins. How important is quality information – and the ability to access it anywhere, enjoy it, share it, scan it, search it, and capitalize on it – in our professional and private lives? Paying six cents a day for a wealth of information is mind-boggling. To call that low price a joke is an insult to jokes.
I just paid a dollar to learn that a velociraptor only weighed about 30 pounds and I still feel like it was worth the purchase for just that one fact. I have been a premium online subscriber to The Wall Street Journal for over a decade, and always felt undercharged. Why? I truly appreciate the sheer amount of real-time information it provides, and the way it provides it. I’m guessing a lot of subscribers to the NYT and FT feel the same about their online subscriptions.
That is my perception on the higher value of information in the digital age. I am eager to hear yours.
Frank Luby is co-founder and CEO of Present Tense LLC, a communications company dedicated to helping people express their ideas through better business storytelling. We work with managers and executives of Fortune 500 companies as well as individual authors, providing a range of writing, editing, and training services.