The price is right

WARNING: Serious media geekery below…

If I had a dime for every minute I’ve spent in a conference room with other media folk debating the right price, if any, for a subscription to the online version of a print product, I’d have a lot of freakin’ dimes.

Perhaps because it hit on the holiday weekend; perhaps because it’s 55 pages of equations and terms like "heteroskedacity," there hasn’t been the discussion I would have expected on Matthew Gentzlow’s Valuing New Goods in a Model with Complementarity: Online Newspapers.

(For the record, I support the rights of those of all skedacities.)

The upshot is that, for The Washington Post online, at least, economic analysis suggests that the correct subscription price is around .14-.20/day. Interestingly, with advertising, the real optimal price is around .09/day. But credit card processing fees make such a low price unattractive.

Further analysis from Rich Gordon.

Mike Orren is the Chief Product Officer of The Dallas Morning News; President of Belo Business Intelligence; husband to Crystal Orren; and a Mungarian at Munger Place Church in Dallas, TX. All opinions herein are mine alone.