The “Corriere della sera”, a bit like the “New York Times” de Noantri, really did it. With an extensive advertising campaign (including airtime on TV) he offered a subscription to the newspaper for €1,99 a week. Which means less than 10 euros per month. Duration one year. I am sure he will reap the well-deserved fruits of this intrepid step. The challenge now is to hold this price forever, like Netflix does.

If it was a bait price, well! our “New York Times” reputation would take a hit and there would be some diaspora of subscribers. No big deal, bad figures in cyberspace pass quickly. Netflix has made quite a few too. They even disappear from Google at some point.

To increase a well-perceived subscription, as Netflix and Amazon have also - rarely - done, you need a huge user base and a loyalty that goes far beyond that achieved with bait prices. Even the admission price of a few euros, which is fixed-term, is a disaster for the consumer who must remember to cancel it, otherwise it will be automatically renewed.

Just look at Apple can't decide when to end the Apple TV+ promotion for iPhone buyers and keeps pushing it back month after month. It is now in October. Subscribers weigh on the stock market and sometimes determine capitalization more than anything else.

To adjust the price of a season ticket in relative safety, it takes many white elephants in the season ticket park and a few gazelles.

BEYOND COMPLIANCE

It seems that a part of the publishing world - a sector of unprecedented complexity and deeply rooted in the cultural history of each nation - is starting to filter with the Netflix model.

It took some time and it will take much more. The publishing industry is a complacent, narcissistic industry and not very inclined to changes that are perceived, more often than not, as "ephemeral fads". It is a highly structured, hierarchical, almost caste-stratified industry. Technology plays a marginal role and editorial managers rarely think about software. Those who incline us are short-lived.

The idea that content is the king does not help the industry to face a time when the bishop is eating the king and the power shifts to the queen, the technology. You can see that technology has been lived badly: the online proposals of some newspapers are painful, confused, the news jumbled up, the interactivity minimal. It seems that there is no curatorship anymore. The paper edition is much better! Not to mention the stickiness of subscription and paying user management systems. All you need to do is send a confirmation fax!

BECOME A TECHNOLOGICAL SECTOR

If there weren't aggregators to organize the news for them, newspaper sites would be what squares are today with the pandemic. And indeed it has been seen: when the aggregators have pulled the plug, as in Spain and Australia, the traffic of online newspapers has been reduced by half. The newspapers rightly want to be paid by the aggregators, but perhaps it could also be the other way around, given the current situation.

Not to mention the books yet. If after twenty minutes you manage to download a digital version of a book from a publisher's e-commerce, you have to call the toll-free number (working from 9 to 18) to start reading it. With Amazon, 5 seconds after the intention to purchase, you are immediately on the cover of the book and can start reading.

If the traditional publishing industry does not become a technology industry, it is heading towards the autumn of its historical cycle.

Elon Mask, with the audacity of which only he is capable, defined, between one flash and another, his role in Tesla as a "technoking" and woe to say that Tesla is an automobile industry. Never! Tesla is a tech industry, s**t! Better Steve Jobs than Henry Ford!

THE NEW MEDIA SCENARIO

About Steve Jobs. 11 years ago, just these days, the mercurial head of Apple clearly explained what was happening in the world of media and information. During the presentation of the iPad at the Museum of Modern Art in San Francisco's Good Weed, Steve Jobs said:

“Once the media were separate, each was on its own on its own distribution channel. A piece of content competed only with a kindred piece of content. Today everything has changed. All media are together and all compete in the same environment: a screen connected to the Internet”.

The consequences of this change were well explained by the Amazon team when, in 2014, in a post on the Kindle Store they wrote:

“We must not forget that books and newspapers compete not only with books or newspapers. Books and newspapers compete with video games, television, movies, Facebook, blogs, free news sites, Twitter and more. If we want to develop a healthy culture of reading, we must make a serious effort to ensure that books and newspapers can compete with these other types of media”.

And here we are: "A large part of this work is to make books and newspapers cost less."

ALL YOU HAVE TO DO IS NETFLIZING

Nothing more true and more necessary to develop to do the right thing in cyberspace. Big information, as we have seen in the sad dialectic between truth and counter-truth typical of this polarized era, is an irreplaceable heritage that must continue to survive and produce subsidiaries of high journalistic level on an ethical and professional level.

But to do this, and not fall into the area of ​​subsistence and patronage, great journalism needs readers and resources. And to get these you can only netflizzarsi. Perspective that is still castor oil to mainstream media people, but that it is whip cream to consumers. Netflix is ​​a model that everyone knows, simple to adopt and to abandon, supported by finance and investors and above all functional.

But there is the immense problem of the subscription price. How do publishers sell at Netflix prices?

Alex Barker, global media editor of the newspaper The "Financial Times", explains why they can and should do it. Let's go with it, even if the FT doesn't use the Netflix model at all, because it can afford it. Enjoy the reading!

IF THERE WERE REED HASTINGS AT THE EDITOR OF A NEWSPAPER

What would Reed Hastings do if he ran a newspaper instead of Netflix? Could he do better than his colleagues in the ex-printed media? Maybe yes; there would be no commercials, just like on Netflix and the “Daily Hastings” would be a subscription-funded venture.

Faced with a huge commercial challenge to its core publishing business, Hastings would likely resist the urge to invest in adjacent industries, such as events or e-commerce. Instead he would put everything in the editorials and contents.

[Putting money into the editorial team is what Jeff Bezos did at the "Washington Post" and the results have shown].

But the most distinctive sign of a hypothetical Hastings management might be something more prosaic: the price. News executives say when they talk to Hastings, he always points out that the subscriptions they're offering readers are simply too expensive. Coming from a man who built a media company with more than 200 million subscribers, this might be an opinion worth thinking about.

THE DONUT OF SUBSCRIPTIONS

News executives are looking to subscriptions as a path to redemption after years of suffering from declining print and advertising revenues. But the high subscription prices are also an indication of the distance this industry still has to travel in the search for a sustainable and truly scalable digital business model.

For example, $27 a month in the United States buys monthly access to Netflix (shareable) along with access to Disney Plus and Spotify's 70 million song library. For that same amount, it is also possible to subscribe to one, but only one, of these online newspapers: "New York Times", "Boston Globe", "Los Angeles Times", "Times" of London.

[If we wanted all of them it would take more than 100 dollars. The question is also another: how many subscriptions can a consumer reasonably support at 30 euros a piece? What could be the monthly budget of an average consumer of cultural industry products? The New York Times media columnist says they spend about $1500 a year on content, which comes to about $125 a month. But he is the media columnist of the most important newspaper in the world and he does it for a living! Let's assume that the average consumer can invest 60 euros a month in digital subscriptions (excluding satellite and cable TV). He will certainly want one for film, one for music, one for sport, he will certainly have Amazon Prime. What remains for newspapers, books, magazines (such as “The Economist” o "Der Spiegel"). Certainly not 30 euros for each! At this point, albeit as a fallback, he decided to let himself be informed by Facebook or Google or other aggregators. Also because through these free services it can overcome the paywall for a limited number of accesses to the site of the big newspaper].

THE PRICE GAP WITH OTHER MEDIA

There are naturally differences in the approach to subscriptions between the various newspapers. Some — such as “Le Monde” and the “Washington Post” — offer subscriptions for $10 a month. Others, like The New York Times, heavily discount admission fees, then charge at $27 a month. The more specialized publications, such as the ''Wall Street Journal”, the “Financial Times” and “Bloomberg”, charge higher rates sure that business users can afford them.

[For example, the Financial Times for the digital anastatic version of the newspaper (FT epaper) charges 50 euros a month, for the site, where you don't understand anything (at least for me) 20 euros a month].

But whatever the approach, there's no question that comparing subscription pricing to other media outlets or through other indicators — such as content investment per subscription dollar — is still disheartening for news consumers. The publishers are fugitives.

For example, Netflix spends $17 billion on content production. It is an investment sufficient to pay for all the newsrooms in America and perhaps also in Europe. PwC estimates news publisher revenues of $22 billion this year. Only a tiny fraction of these revenues are spent on journalism and newsrooms.

Digital subscription revenue is a godsend to meet the decline of print and advertising. However, some publishers rely too much on loyal fans, loyal to the magazine and ready to support it even with an off-market price. Donald Trump has also lent a hand, in terms of subscribers, to the big newspapers. But if Trump was an erupting volcano, Biden is a candle for information. Of all the philanthropy that has poured into the newspapers in Trump's four-year period, little will remain.

That philanthropy can work is demonstrated by the case of the "Guardian". The Manchester newspaper started asking for voluntary contributions in 2016 and now has more than 900.000 'supporters' who contribute at least £5 a month.

THE CATENACCIO OF PUBLISHERS

As an investment proposition, the information is clearly different from the show that runs on Netflix or the music on Spotify. Often it does not go beyond a local audience and information is an immediately perishable commodity.

This state of affairs has fueled a defensive mindset within the industry. The publishers' top priority has been to control costs and generate revenue from a loyal reader base. The policy, that is, of the white elephants that works wonders in the app market. But that pays less in this media segment.

In the more than a decade since paywalls were introduced, only a handful of publishers have garnered more than a million paying readers. And most subscribers are willing to pay for just one publication.

A NEW PHASE?

Hastings' strategy for Netflix was totally different: he invested in technology and quality content, with aggressive pricing aimed at building a mass audience around the world.

The “New York Times” (5 million digital subscriptions) and the “Washington Post” (almost 3 million) are entering a phase of more ambitious expansion. Both titles have expanded their newsrooms by a third compared to even the golden age of print. The New York Times thinks it can attract an audience share of 100 million readers.

More investment may be required for that type of scale. Smaller, reader-funded news organizations also face difficult choices regarding newsroom type and mission to best serve their target audience.

Rasmus Kleis Nielsen, director of the Reuters Institute at the University of Oxford, described this challenge as a challenge for survival "in the most competitive battle for people's attention that we have seen in human history". For him it goes like this:

"While journalism likes to portray itself as a bold and irreplaceable business, the question arises whether publishers have truly grasped the enormity of the challenge ahead."

Source: Alex Barker, What news publishers can learn from Netflix, “The Financial Times”, March 18, 2021