The Cost of Consumption

The Cost of Consumption

by mike in boston / @mikeinbostonemail

 

Good morning sports media readers. The Star recently launched a new digital subscription service. This is their 2nd attempt at a paywall in the last several years. It comes on the heels of a very expensive app-based failure called StarTouch. This was by far the most enjoyable digital reading experience available, in my opinion, but they scrapped it fewer than two years after launch. The Star’s financial picture has looked bleak for a while and this move from free/ad-supported to paid provides some insight into what they think they have to charge to stay in business.

 

The reason this is noteworthy is that the cost of digital news coverage has mostly followed the cost of print coverage. What I mean is that the business model of newspapers traditionally included all kinds of non-journalism revenue streams: classifieds, obituaries, and flyers. This created a kind of false economy because these peripheral businesses were propping up the core product. The internet killed that and newspapers now need to figure out if there is a viable business model for journalism without these other sources of revenue, and where consumers want a digital rather than print product.

 

One option that people like me have been pushing is the Netflix model. Instead of competing for exclusive access to the same reader, make your content available so all readers can read all the news that is being published. Apple is apparently talking to publishers about just this idea, having bought the Texture magazine app last year. According to the report:

 

“An additional worry for the papers, says one executive familiar with the conversations, is that being part of a bundle of publications is less attractive than a one-to-one relationship with subscribers.”

 

This gets to the heart of the problem with subscription strategies. Papers traditionally fought for the heart and soul of the household, with the reasonable prediction that people would subscribe to one newspapers for the kitchen table but probably not two. They have imported that thinking to the digital domain, where it makes no sense at all. No one under 60 is going to be brand-loyal with their clicks. It’s just not how people navigate the world. This is why digital outlets want you to use their apps. It locks you inside a sandbox, where they can direct market to you, scrape your data, and hopefully build the habit that this is where you go for news first. Makes good business sense, but it is annoying to the consumer.

 

With all of that in the background, let’s look at what is available for sports media consumers. Monthly CAD sticker price rates chosen for standardized comparison. Plenty of discounts available.

 

  • The Star — $20/month for a digital only subscription, including a sports department that features Bruce Arthur, Dave Feschuk, sometimes Damien Cox and Rosie DiManno, Doug Smith, Richard Griffin, Kevin McGran, Laura Armstrong, and others.

 

  • The Sun — $10/month for a digital subscription, including a sports department that features Steve Simmons, Steve Buffery, Lance Hornsby, Rob Longley, Ryan Wolstat, and others.

 

  • Globe & Mail — $26/month gets you online access, including all the Cathal Kelly you can handle, Dave Shoalts, and others.

 

  • The Athletic — $12/month gets you sports from across all of North America, including local writers James Mirtle, John Lott, Eric Koreen, and others.

 

Sports media consumers have a choice between paying for one (or more) of these subscriptions or cobbling together the limited number of free to read articles at each outlet on a monthly basis. Depending on how much you read, the free option will either be totally adequate to your needs or somewhat limiting. Of course there are plenty of other outlets as well such as Yahoo!, CBC, TSN and SN, and the many blog networks that also provide local coverage.

 

Whether any of these subscriptions represents good value is going to depend a lot on the reader’s own broader interests. If you’re really into business news and sports then maybe the Globe price seems reasonable. If you like coverage of local politics and ongoing investigative journalism then The Star is bringing a lot more to the table than just sports for $20 a month. However, as Howard Berger notes, despite their new paywall The Star have not been sending their hockey folks on the road to cover the Leafs to start the year. The Sun’s low price is interesting, given that they have a large sports section and currently are investing lots of money in sending their people on the road with all the local teams. The only outlet catering directly to sports readers is The Athletic and for $12 a month you can read around 10 full-time local writers in addition to hundreds of writers from other markets if you are so inclined.

 

Other points of differentiation between these offerings include things like:

 

  • opinion vs game stories vs analysis
  • auto-play videos
  • ads vs no ads
  • comments sections

 

As I have written many times, rather than competing for subscribers I would like to see these sports departments try to collaborate. Perhaps the market for a mega sports pass would be small, but the alternative is no money for anyone from that potential subscriber. Faced with the cost of multiple subscriptions some consumers will simply walk away.

 

Over to you:Which of these options is most compelling? How do you see the value of the offerings? How much would you be willing to pay for an all-inclusive sports media subscription?

 

 


 

thanks for reading and commenting,

until next time …

mike (not really in boston)

photo credit: GLENN LOWSON/THE GLOBE AND MAIL

COMMENTS

WORDPRESS: 11
  • comment-avatar
    James 1 month ago

    I don’t see the point paying for any of these online publications when you can find so much information and opinion free online or by listening to the radio. For the $12-20 they charge per month you dont get anything you can’t find somewhere else for free.

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    I bought an Athletic subscription last December, and I’ve enjoyed it quite a bit. They’ve really done a tremendous job hiring writers who offer something unique that you want to go out of your way to read. That said I bought it during one of their sales. Might have been 40% or even 50% off. At that price I’m very satisfied and would do again. At full price, I might hum and haw a little about renewing even though I’ve enjoyed it a lot.

    The Athletic is the only sports site I pay for (and honestly feels like the only one you really need, there’s so much content). Between that and paying for NYTimes for news I feel like I got my bases covered without spending too much.

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    Seems like more and more local writers I follow on Twitter end up working for the Athletic and ending my free reading of their articles. They’ll post a teaser and you can read a couple hundred words but then you have to subscribe to read the rest. I haven’t subscribed yet but I guess I’ll have to if they add four or five more local writers. 

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    Justin 1 month ago

    The Star, Globe, Post, and Sun all have paywalls that one can effortlessly get around. I’ve never been encumbered from reading whatever I’d like from any of those sites (although the Sun is the only paper with a sports section still worth reading).

    At the same time, it’s impossible to get around The Athletic’s paywall, which is why I happily pay for it. It’s so far and away better than newspaper sports sections that even comparing them is a clown exercise. Almost every day there’s a new piece on The Athletic that makes me think “wow – what a great, in-depth, special read” and the breadth of their content far surpasses any newspaper.

    If newspapers want more people to subscribe digitally, it’s time they a) stop making paywalls a 5th grader can get around and b) feature more unique content than wire stories, gamers, and run-of-the-mill columns.

  • comment-avatar
    Gary M 1 month ago

    Justin, I think they’re sort of stuck because they know with a legit paywall their readership will nosedive, and a ‘mainstream’ paper derives a lot of its heft from reaching a lot of people. You know you’re reading what other people are reading.

    mike, I think there was another false economy in traditional papers. The one that says a lot of people cared what Justin Smoak has to say in the locker room. They read it because it was there. They’d never pay for it. Most fans just want to watch the game and then post/read comments about whoever did badly.

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    I don’t know why, or what happened, but for sports I just stopped going to any of the newspaper sites altogether. Guess the lack of quality writing after years of layoffs was part of it, but just got my news and opinion pieces elsewhere. Like @daniel I also got a 50% off deal for the Athletic recently, and although I was skeptical with all the hype (including from this very site) I’ve found it to be quite good, and the presentation is as well. Colour me surprised that I would pay for news, and not mind it.

  • comment-avatar
    old watcher 1 month ago

    Question for all of the knowlegable people on here.. how come 29 NBA teams have 1 “regional” broadcaster and people have to be in a 200 mile radius to watch! But, the Raptors have 2 “regional” broadcasters on 5 different channels, and viewers within 2000 miles can watch?   A Piston fan in Windsor who lives 2 miles from Little Ceasers Arena has to purchase “NBA Pass” to watch their favourite team! But a Raptor fan in Calgary can see all the Raptor games without “League Pass”!! My question is, how does the NBA allow this? Are they not throwing “League Pass” money away by making the Raptors region all of Canada?

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    Gary M: The NYTimes has a paywall that I’m sure some sophisticated folks can get around, but my two preferred methods (preventing the article from loading fully before the paywall comes up, and googling and clicking from the search page) are both useless against it. Why all of those local papers in Toronto don’t go the NYT route is beyond me.

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    @Josh – you can get around the NYTimes paywall if you clear your browser cookies. That works for most paywalls.

    @oldwatcher – I believe the Raptors “local” region is only Ontario. I assume TSN and Sportsnet (whose corproate owners also own the Raptors) pay the NBA for national rights. They probably pay a fee equivalent to what the NBA thinks they lose from League Pass. Plus Canadian NBA fans probably still buy League Pass for all the other games. It makes sense to have the Raptors games nationally to help grow the Raptors and then NBA in Canada.

    As for the media, I really want the news media to survive, and hopefully somebody finds a solution, but it’s just not worth paying for. I really don’t know what would make me subscribe to be honest.

  • comment-avatar

    Gary M: “mike, I think there was another false economy in traditional papers. The one that says a lot of people cared what Justin Smoak has to say in the locker room. They read it because it was there. They’d never pay for it.”

    great point. none of the traditional papers have, as far as I can tell, really invested in “premium” content in the last decade. the kind of content they focus on most of the time is precisely the kind that “free” competes with easily. If they packed each week with investigative stuff, hard to find stories, interviews with James Reimer’s mum, and other unique items then the case for buying a sub would be much stronger.

  • comment-avatar

    A few points from my perspective:

    I still refuse to pay for online content when you can find many alternatives for free. There’s no writer out there that I’m so enamoured by that I need to pay to read what they write. Sucks for those in the industry that many people like myself think that way, but selfishly, it doesn’t affect me.
    It is so easy to get around the paywalls anyways, so it doesn’t really matter. I also still don’t care for a The Athletic subscription, so however hard it is to skirt their paywall is of no effect to me.
    At the prices the papers are offering these online subscriptions for, I’d much rather have a physical paper delivered to my door at a fraction of the price. I have no issues opening up and reading a paper in lieu of my iPad/phone/computer.