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Could Google and Facebook help introduce dynamic pricing for news?

World News Publishing Focus

World News Publishing Focus
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Could Google and Facebook help introduce dynamic pricing for news?

Writing on Monday Note, Frederic Filloux proposes a new model for selling news subscriptions: one that takes lessons from how airlines adjust pricing “based on what the market is willing to pay” at any given moment.

As an example, Filloux indicates: "Based on your zip code, your browser (and the cookies stored in it), and the device you use (Mac, PC, iPhone, Android), you might get a slightly different price for exactly the same item, whether it is a hotel room, an entertainment ticket or even a stapler".

Arguing that dynamic pricing is becoming a staple of e-commerce also more generally, Filloux notes that the news sector has largely ignored this trend. Given the multitude of data points that Facebook and Google collect, the two services could offer a way to sell news subscriptions at varied price points, based on the information they have on their users.

Filloux’s proposal is worth it to be read in full, but a couple of points deserve to be commented on: first, dynamic pricing hasn’t arguably been tried for services comparable to news subscriptions yet, so its effectiveness for this particular model remains unproven. For instance video and audio streaming – services that resemble online news subscriptions more than the airline business does – use fixed pricing.

Second, and perhaps more important point is that offering clients different prices might easily result in a backlash from readers: would they accept the logic of having to pay a higher fee based on their income, education level, home address or some other criteria? Would it be seen as clashing with the values of fairness and transparency that the newspaper industry generally professes to maintain? Moreover, wouldn’t this be an invitation for more tech-savvy readers to game the system, for instance through faked IP addresses or false accounts?

Still, it is undeniable that the data Google and Facebook have on their users could provide vast potential for the news industry. Perhaps a careful implementation of dynamic pricing would be through one-time special offers, which would offer a subscription for a fixed period, tailored based on the user’s profile, but after which the reader would transition to a standard fee.

Author

Teemu Henriksson's picture

Teemu Henriksson

Date

2017-02-21 14:18

Author information

The news publishing industry is experiencing transformation at an ever-growing pace, with new policy issues arising as the landscape changes.

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