Content by the Pound: Packaged and Priced to Sell

As any good butcher knows, and many Web publishers are beginning to appreciate, you can't always sell customers the whole hog all at once. The art of merchandising is knowing how to slice, trim, package, and price the pieces for easier sale. Something like this is starting to happen among online content providers as they struggle to answer the eternal question of new media business models: what will users pay for?

With the subscription model working for only a select few, publishers are beginning to experiment more aggressively and creatively with selling their wares by the pound, neatly packaged and delivered at just the time and place a customer most needs it. In short, content is learning the art of merchandising. Two venerable brands in particular, and Consumer Reports, discovered that the first place to look for salable goods was their own archive. Everything Old Is New Again
While virtually all of remains free and ad-supported, the company is exploring the value of selling some of its own antiques. "Glory Days: Baseball in New York 1947-1957" is a package of archival Times sports articles, as well as multimedia quizzes and audio interviews focusing on the heyday of the Yankees. At the low price point of $9.95, users can get access to this premium mini-site for a year. While intended as a niche product that would have special appeal for current Yankees fans, Glory Days attracted 300 subscribers in just the first three days. "We know we'll be passing the break-even point on this," says Stephen Newman, Assistant General Manager,

Breaking even is easy to do with this sort of archival repacking because any publication's old content is about as high margin a product as one can imagine. Aside from drilling the Times' own morgue for the best articles and photos, digitizing some old sports content, and getting the in-house development team to wrap it in a presentable template, "very little up-front investment was made…in fact, almost next to nothing," says Newman.

Which is good because "almost next to nothing" seems to be the cost structure necessary to making online content profitable these days. The Times is leveraging its own massive database of millions of registered users and email newsletter subscribers in order to promote the project within its existing infrastructure, as well. Because of the minimal investment involved, the company can experiment with a many different content categories in this format to find what the market wants and at the same time maintain the low price points that seem essential to selling general content online. "Glory Days" is the first in a series of pay-to-play packages will launch in a new "Editor's Choice" area of the newspaper site. Newman expects that this format is well-suited for back of the book material: travel, film, op-ed, books, etc.

Whatever the packaging and price points, Newman believes that brand strength and quality editorial are the key to getting users to pay online. "You can put on as many bells and whistles as you want, but if it isn't compelling content at its core, then you aren't looking at a very viable proposition," he says. The value for readers is in getting content that hasn't seen the light of day in half a century and is unavailable elsewhere, unless of course the rabid fan wanted to go half-blind reading scratchy microfilm in the local library. But even then, users can't get what the Times really is selling here, editorial expertise. The selectivity the editors apply, the pristine quality of the photos and over all layout, and just the sheer talent of those great Times baseball writers of old constitute the real value. These are the traditional values of print that somehow got lost in a decade of free-for-all content, and lots of it, online. The wire service format and more-is-more ethos of Web sites in the 90s seemed to obscure some of the very publishing values that made content worth paying for. We don't buy magazines and newspapers simply for information. We choose and pay for an editorial sensibility, story choice and focus, presentation, packaging, and delivery. These kinds of small, but well-crafted, premium projects are significant not only because they probably will make some money, but also because they reassert important traditions and business models onto the Web. Content À la Carte
If is opening up an antiques boutique in its well-trafficked department store, then you might say that has decided to deploy a fleet of street vendors to sell bits and pieces of its main product in the neighborhoods where people shop and live. In Yahoo!'s shopping areas and AOL's auto section, users now can purchase specific CR product evaluations and pricing guides at an incremental cost, $2.95 to $12.

"Several thousand reports are sold every month, so it is working reasonably well for us," says John Sateja, Vice President of New Media, Consumers Union. "From a branding point of view, it's important that we have our content where people are shopping." And it's certainly cheap to keep. CR is simply parsing its existing material, both the archived magazine articles and the online updates, into highly targeted modules that can follow the consumer into the e-shops. This is an online distribution system that mimics a real-world behavior, the common practice of people bringing the relevant issue of Consumer Reports with them into bricks and mortar stores.

These mini-reports are packaged very wisely because they telegraph to consumers where the real value begins. At most of the distribution points, CR provides for free some general buying advice (words, words, words) for the relevant product category. It's the research and testing results that will cost you. In other words, the consumer knows she is paying mainly for specific material that obviously costs money to produce (the testing labs) and clearly can save her money. This obvious point about how to merchandise a product seems to be lost on many other content providers who seem to think that users will be eager to pay just to gain deeper access to the same material that they see for free on the home page.

Sateja admits that even a venerable brand like CR cannot sell itself all by itself. "It's not just putting your content out there. You really do need to market it." Pushing your à la carte wares out to distribution partners requires constant diligence, getting more exposure on AOL's mighty welcome page, or finding ways to insert the brand wherever consumers might need it. And while the extra cash from these report sales is nice by itself, that is not the real point. CR does not make its mini-reports downloadable. Customers gain access to the report online for a 30-day to 90-day period at the CR site, which puts them in the ConsumerReports. org house where Sateja can pitch them the real moneymaker. "The big opportunity is to get people to subscribe, and the branding exposure and the traffic generation from that are the real opportunities that are there," he says. With 645,000 paid subscribers to the full online product, we'd say that knows what it's talking about.

Just as both of these publishers embrace the cheap, efficient distribution of the new medium, they are applying to it some tried and true lessons of basic merchandising: give customers demonstrable value from a reliable vendor, price it to sell, and give it to them in the serving sizes they prefer. As programming options increase exponentially, brand loyalty among content consumers will continue to wane. It may well get harder and harder to sell people the whole hog.