Today PaidContent published a guest editorial post I wrote about how freemium for news could work. I tried to crunch some numbers and figure out how to make the numbers work in my post. Here’s an excerpt:
If you do the math (i.e. back out from the weighted average of $12/year/user), 99 percent of users (call this the paper’s “economy class” customers) are worth $11/year/user to the Herald, while the remaining 1 percent of users (call this “business class”) is worth $120/year/user. For similar newspapers to improve their online revenue, those are the numbers they would need to beat.
Can it be done?
I not only think it can be done, but it must be done. This is a pretty insightful piece, but I disagree about the importance of reducing ad content for premium users. That top 1% are likely pretty adept at navigating the internet and, like most of us who spend the majority of the day on a computer, have created blinders for online ads. Unless the pop down or get in my way, I don’t notice an ad one way or another.
Thinking of the disparity between user groups as business/economy class provides a workable framework to move forward in dividing content. The key, which I think you do a great job of highlighting, is giving those business class users unique content. I haven’t seen anyone else work in the idea of taking advantage of the power user’s desire for status, and I think it’s brilliant. Allow them to link to their blog/facebook/twitter so that everyone can see that they are power users and you’ve created an entirely new and marketable product for the premium users.
Great article, I highly recommend giving it a read!