How the willingness to pay differs for paper and online readers

wsj_options

This is the pricing schedule of The Wall Street Journal for new subscribers. It is interesting to see how they priced the versions and make some observations:

  1. Even though online version has many advantage including saving a copy, easy access and participating in online discussions, this version is priced lower than he print version. This is probably there is a negative differentiation value due to convenience, need for a computer and the difficulties in reading on a screen.
  2. There is still a segment, probably decreasing in size, that prefers the print version. They value more the convenience of reading anywhere and the format.
  3. The  marginal willingness to pay for print version is higher ($2.69 – $1.99 = $0.7) for those who prefer online version than the marginal willingness to pay for online version ($2.69 – 2.29 = $0.5) for those who prefer print version.
  4. It is conceivable that the marginal cost of providing online version to one subscriber is $0 but The Wall Street Journal pricing at customers’ willingness to pay.
  5. They are trying to nudge customers towards the bundle by indicating best offer. This I believe is aimed more at the print subscribers than the online subscribers. This is because, there is a marginal profit of $0.5 per subscriber who picks the bundle at practically no additional cost. Even if there is a variable cost per customer for online version the print subscribers (by their preference for print version) will most likely consume very little of the online version, thereby incurring very little cost.

The WSJ is still the only newspaper to charge for online access, given the observations above they may never give their online version for free.

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