News needs to go Netflix

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The way we buy news is a ridiculous bundling mess. The news needs to go Netflix.

I don’t buy weekday newspapers now, that change happened years ago, because no one newspaper is going to have all the news I want to read. Simple fact. Buying one paper means a lot of redundancy. Take Thursday. There was an article by David Aaronovitch in yesterday’s Times which I wanted to read. Tweets suggested that it eviscerated Ed Miliband over his Syria reaction, and it sounded like it was a surgical piece of assassination prose. (Being honest, you could piece it together from all the online analysis within hours of publication.)

I wanted to read Aaronovitch’s column, but not enough to go and buy a copy of the newspaper – largely because I didn’t want to read the rest of the paper. Buying a paper is a waste of time and money if you’re only seeking out one article. It’s a really inefficient bundling of goods for the reader. If you went to a supermarket for one item, but were forced to pay for a bundle of 20 assorted random items to get it – would you? Of course not.

As Ben says, though, newspapers have struggle with pricing models. The bundle is king, he says. I’m not so sure. I think matching your content to your customers’ behaviours is more important (I’ve written about it here and here).

Let’s look at Netflix. It hosts hundreds of shows and films, which would effectively be competing inefficiently for attention, were they shown across numerous disaggregated channels in fixed time slots on traditional TV. Hugely inefficient for the provider, who are taking an educated guess at when best to hit the audience, and do it in one shot. It’s worse for the audience, who have to bind themselves to time-slots if they want to see their favourite content as it gets released.

Netflix lets the provider empower viewers to fill their available time in a way that suits them. Got five hours’ to spare? Binge away on one series, episode after episode (no week-long gaps). Want to watch your content in 15-minute snippets? That’s fine too, it’ll re-start where you left off. (Be honest, have you ever snuk a sneaky five minutes of Breaking Bad while on the loo?) Want to mix original movies with ShowTime series with AMC with some classics? Go for it. Kevin Spacey gets it. Allow the user take control.

Take a cohort of 40 shows on standard cable. Let’s say that three of the 40 interest me, and they happen to overlap, time-wise, or be on three different channels, one of which would require a subscription I don’t currently pay for. Unless the rest of that channel matches what I’m interested in, it’s unlikely I’ll shell out for it on the basis of one show.

The same goes for news articles. If you think of the David Aaronovitch article as a TV show, and The Times as that channel I don’t subscribe to – I’m not going to buy the entire channel for the single show. I lose out on access, the newspaper loses out on revenue.

But if there was a Netflix approach, where newspapers pooled content and I could pay a all-in fee, without having to commit to one single outlet, I’d pay for that. (Kind of like Oyster is trying to do for books)

Maybe, in an inarticulate fashion, it’s the kind of bundle that Jeff Bezos was talking about at the WaPo, and which he could use his infrastructure to bring about. It’s not a direct translation of the model, however, because news organisations compete with each other in a different way than TV shows. TV shows are not competing on the basis of first-past-the-post with the facts, they’re not racing each other to explain a topic. They’re vying for a slice of the audience’s valuable time, but not with barely-differentiated content, as news orgs do.

Pooling news content (or a differentiating portion thereof) in a Netflix/Spotify-style system, with subscribers paying monthly for unlimited access, would require a critical mass of providers joining up, and would mean figuring out new criteria for selecting the portion of content for ringfencing. Perhaps, once an article starts to trend, administrators flick a switch to push it behind the Netflix-style paywall, thus motivating the reader to sign up for that nominal monthly fee.

Until that comes to pass, until the media orgs make it easy for me to pay in a way that gives me convenient access to the content I want, when I want it, I’ll continue to do what I do now. I won’t buy any newspapers during the week when my time is precious. I’ll buy perhaps two or three papers at the weekend when I have time to browse through a bundle. And I’ll continue mainlining the available content as it suits me, with no-one getting any revenue benefit from that media-hungry behaviour.

Edit: Sept 10, 08.30am - adding a few of the online responses here…

 

 

  • Paul Watson

    Do you have any info on how well the creators/owners of the shows Netflix has are benefiting from Netflix? Be curious to know how well the model is working for them.

  • patricksmithjournalist

    PAYG on an Oyster style micropayments model would be elegant for the user but wouldn’t generate enough capital for the media companies to invest in the kind of technology that you’re advocating.

    Netflix was only able to build its fantastic VOD system – you list not all but just some of the features above – via the investment its customers had made over many years via monthly subscriptions. Spotify is another example.

    BSkyB is the key example here: it only started offering day passes after reaching 10m subscribing households. It could only offer an al a carte option once it had shored up its subscription revenue model, where 1/6 of UK households pay about £300+ a year. TV Now would simply not have been possible without regular, long-term, recurring stable revenue.

    How can publishers generate the kind of money needed to build and sustain the kind of products that consumers expect without the long-term visibility of bundled subscriptions?

  • WikaNin

    A similar argument was made for cable channels … I just want 1 channel so why do I have to pay for 15 … 14 of which I have so desire to watch. This article talked about it – http://www.theatlantic.com/business/archive/2011/06/why-cant-we-unbundle-cable/239849/

    News isnt free … you pay the photographer, reporter, editor, publisher and also have to pay sales, distribution etc etc … the “cost” of that 1 article you want to read is more than you would ever really pay for it.

    • markhamnolan

      Netflix unbundles cable in an entirely different way. It doesn’t disaggregate at the channel level, rather it goes to the programme level, freeing them from the strictures of the channel. That’s a great Atlantic piece, though, thanks for sharing.