Monday, May 09, 2005

Bundling

Bundling:

This practices is probably the one with the clearest beneficial effects. It is still incredibly annoying. Within your typical broadsheet styled paper, there are sections for national news, local news, sports, classifieds, arts and leisure, and a number of different other sections. While it is possible that someone may read the entire paper, it is not likely. Some pick up the newspaper just for the sports section – some pick up the newspaper just for the local news, some pick it up to read the latest Doonesbury. Whatever the reason, a large portion of the newspaper is discarded like yesterday’s news among these readers.

It makes short term economic sense, after all, an advertiser who pays for an ad in the sports section pays per circulation, even if half the newspaper’s subscribers don’t read the sports section. But it makes for long-term annoyances – for most people, most of the newspaper is filler.

A direct analogy can be made in the music entertainment industry, which used a practice of putting out albums with perhaps one or two “hits” and a number of songs as “filler.” People would pay the inflated album price to hear the hits, instead of paying for the singles (which was phased out in the nineties to support this business model.) What happened to that model was Napster – when people were trading singles online, caring little for the “album” that produced it. People, when given a choice, will buy the wheat without chaff.

With the advent of online news, newspapers are in a similar situation. News consumers have a choice of going online and getting wheat only, or the mostly-chaff newspaper. And while there will always be people who prefer having tangible forms of music – CDs instead of MP3s, there will always be people who prefer tangible forms of news. Still, the music industry partially adapted by offering singles download services. The newspaper industry has yet to adapt.

The idea that advertisers will lose advertising revenue if newspaper sections were offered a la carte is a sound one – after all, if only 50 percent of customers opt to get the sports section, the ad is delivered to 50 percent of households. But advertisers already know that their work will be read by 50 percent, or whatever number, of their target market when they purchase a particular spot in the newspaper… or in other words, the local sports bar wants to be advertised in the sports section, IBM wants to be in the technology section, and the Atlantic Monthly wants to be in the news section. Advertising revenue should remain relatively constant. In the meantime, subscribers have to put up with less litter, they get the information that they want and don’t have to go through junk to get it.

Alternatively, papers could simply combine all the sections into a single fold, which would get rid of the “junk” problem.

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