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
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