Reference prices did Newsday in

A redesign and relaunch that costs four millions dollars for sales of $9000.


You bet. The brand in question is the Newsday website that went for paid subscription to their content and ended up having 35 people sign on in three months. The Dolans who bought the New Island daily and relaunched its website wouldn't have done so if they had an inkling of the concept of 'reference prices'.

Consumer use reference prices as basis for comparison. That is, they compare the asking price with what they have as a reference price. Now the reference price could either be internal or external. Internal reference prices are drawn from memory for comparisons, whereas external prices are ones taken off competing brands. What's the reference price when it comes to new content online? Zilch. Surfers currently pay zilch for news content. If that were so, why should they be paying for such content just because its on a redesigned news site? They won't and they didn't. That's why is in trouble.

To get consumers to pay, Newsday will have to have content that is differentiated and worthy of payment. That is difficult to come by when the same news content hits news sites around the world and is available for free. Sure, can come up with news analysis, but hey, even that's available for free elsewhere.

I am not too sure if anything can save Newsday except maybe all news sites turning into pay sites. That, at least for now isn't going to happen and even if it were, I am sure someone who has access to the very same news will then propagate it free of cost.

Shall I say R.I.P.,


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