Is News Bundling the Answer to Failing Paywalls? Jeff Bezos Thinks So

Oct 16, 2013

Article ImageWith his recent acquisition of the Washington Post, Amazon CEO Jeff Bezos believes he can persuade readers to pony up for a daily bundle of news on a tablet, similar to traditional print bundles. "People will buy a package. They will not pay for a story," Bezos said recently during a meeting with editors and reporters. If his plan works, it could serve as a viable business strategy for other digital publishers going forward-especially if paywalls aren't working and if those news bundles are personalized for readers, say the experts.

Cliff Conneighton, senior vice president of marketing for Hybris Software in Chicago, believes Bezos' news bundling strategy will succeed, but only if the content he bundles is compelling and not available for free elsewhere. "The key is, how will he choose what news is bundled? I suspect he'll make bundles that are dependent on what he knows about the interests of his customers," says Conneighton. "The key to making something interesting is personalizing it, which is what people are willing to pay for."

Bundling can work, agrees Kim Garretson, research fellow with Reynolds Journalism Institute at the Missouri School of Journalism in Minneapolis, but only if done properly. "The bundles (must be) personalized to the individual via a combination of their subscribing to certain topic-based feeds of most interest to them, combined with technology that surfaces equally good content for their interests by tapping the social graph and other analytics," says Garretson.

Mike Schaffer, director of digital strategy at Hager Sharp in Washington, D.C., a communications firm headquartered a block away from the Washington Post, says he puts his faith in Bezos' track record of success and that providing digital news bundles may prove more popular than the doubters expect. "People use more electronic devices like tablets today, but may not want to engage in constant digital conversations in a social media fashion. Whether or not it works will rely on adoption from his reader base," Schaffer says. "However, the (tablet news bundling) strategy is somewhat counterintuitive to today's online news delivery mode."

Indeed, Bezos' critics might say he's trying to fit a square peg in a round hole here. But Conneighton doesn't agree. "When creating a physical newspaper, the big constraint is putting ink on paper and delivering it to your driveway every morning. But when you deliver news online, you have infinitely more flexibility in how you can bundle, personalize and deliver it," says Conneighton.

Additionally, at a time when paywalls may not be the best solution (consider that the Dallas Morning News and San Francisco Chronicle recently nixed their news paywalls, but continue to provide premium services to paying readers), bundling of preferred, premium content for a price may be a smart alternative.

"If a paywall (allowing access) to all your news doesn't work, maybe a paywall into a bundle of your news would work better," says Conneighton. "There only two ways for publishers to make money-they can sell advertising or sell content. But the total amount of money advertisers are spending is flat. So publishers have got to find a way to sell their content. One tactic is to sell a piece at a time or a bundle at a time, and see what works."

However, Garretson, who's not a fan of paywalls, says charging readers' fees won't be enough to fund news bundling: advertising and e-commerce innovation will also be required. If he were Bezos, Greg Bobolo, CEO of SendtoNews in New York City, says he would attempt bundling news with hardware like tablets "to incentivize the customer, especially aging print readers whom you want to convert to digital. I would also lower pricing if readers also subscribe to the print edition, or explore eliminating the print edition and pass the savings on to the customer and offer free hardware."

Schaffer encourages electronic publishers to consider other alternatives to news bundling for a fee. One option is to offer "insider content" for an extra price, much like does. Another is to explore "crowdsourcing," whereby your publication is funded by donations from readers, much like PBS is fueled by dollars from appreciative viewers.

"You could also pursue opt-in technology, where you release content without a set fee attached to it, but ask the user to pay what they think the content is worth," says Schaffer. The rock band Radiohead, for example, enjoyed great success years ago when it allowed fans to download its new album for free or whatever price they thought appropriate.

Schaffer adds, "Crowdfunding and content bundling wouldn't be my first choices, but I do think both strategies could bring value to a comprehensive content distribution program and merit consideration."

(Image courtesy of Shutterstock.)