Online Content Bundling
By Arnold Kling
In general, it doesn’t seem like a good idea to give your product away if you are a company, but given that most newspapers do, why doesn’t the WSJ? …Either the WSJ is making a mistake or other newspapers that do give stuff away are making a mistake.
A free web site would make it too easy to cherry-pick the interesting content, strip it down, and reproduce it and circulate it without the ads.
…We return to the potential dangers of unbundling, and the possibility of picking apart the WSJ until it isn’t a newspaper any more. An upfront charge makes sure the value is reaped before most of the paper is discarded.
To me, the mystery is why there is not more bundling. Suppose that you could aggregate many newspapers–or blogs for that matter. At some point, the aggregate would be large enough that consumers would be willing to pay for a subscription.
Six years ago, I wrote The Club Vs. the Silo.
the “silo” model tries to maintain an anachronistic wall between the content in one silo and content in other silos. In the world of physical magazines, it certainly makes sense that a subscription to “Business Week” does not entitle you to read “Forbes.” Clearly, they are two separate physical collections of paper.
On the Internet, however, this distinction is not a physical necessity. Most consumers in fact pick and choose articles from a variety of online magazines. In contrast to the physical world, consumers can engage in extensive content aggregation without imposing meaningful costs at the margin.
A second thing wrong with the traditional silo model is that it ignores a critical component of value. Because of the volume of content available on line, the marginal value of additional articles has gone down. The marginal value of annotation, filtering, and recommendations from other consumers has increased. As J.C. Herz put it in an article in “The Industry Standard,” the “digital future is probably in the margins, rather than on the pages.”
…For an economic model, I continue to recommend the idea of “clubs.” A club would provide content aggregation, recommendation, and annotation services. Journalists would be paid by clubs, rather than by individual publications. For a consumer, joining a club will provide access to value-added services relative to online content.