Ev, we should talk! Or you should read some of my published work on a radical new architecture for providing “the best convenience and value for the consumer” across a wide range of usage levels and willingness/ability to pay.
There is a path to the world you are “looking forward to,” and it cuts through many of the knotty problems you cite. The key is mass-customized subscriptions that dynamically adapt to different user value propositions by dropping the antiquated idea that all subscriptions must be at some standard pre-set price ($5/month?). After all, digital is all about mass-customization — we just blindly assume that applies to everything but price. You just have to move from a commodity product mind-set to continuously seek to find out what each customer values.
The FairPay architecture shows how to change that. (It has been described briefly in Harvard Business Review, and more fully in the Journal of Revenue and Pricing Management, “A novel architecture to monetize digital offerings.” A very simple introduction with nice graphics is in this popularization of the journal article. There is also the book I was invited to write, FairPay: Adaptively Win-Win Customer Relationships. And more on my blog.)
Why do you think every Medium subscriber should pay $5/month? Some want to read a lot of your “premium” content, some just a little. Some can pay $5 and not care if they get $5 worth, others know they will not get $5 worth or can’t afford that. Some can and would pay much more. Why does the NY Times think every subscriber should pay $16/month (after a year at half price)?
The “subscription fatigue” you speak of is a real problem, but only because we use stupid pricing that gets revenue only from “superfans” and leaves others (who would pay something, but not the superfan price) out in the cold. It would be far more profitable to get smart about serving them at a fair price for their needs. Most current subscriptions generate revenue from only 1–7% of readers. What about the next 20–80% who would pay at a lower but still-profitable level?
Aggregation makes sense, but flexible pricing of individual subscriptions could produce much the same effect (in price, but with more friction). And even aggregation should be at flexible prices. Some use Netflix and Spotify heavily, some do not. Why not price that flexibly as well.
Casual readers who might pay balk at subscribing because of pricing risk: “will I read enough to be worth $5?” Even after a few months trial, that may be unclear, and it can change from month to month. On the other hand, usage-based micropayment models fail because they do not offer volume discounts: “if I read too many articles it will cost far more than a subscription.”
Flexible pricing may seem challenging to the point of being unworkable — most businesses seem to just assume so — but the new FairPay architecture points to ways to do that. Solutions range from simple post-bundling, to richly participative pricing processes that seek to be fully win-win and cooperative.
FairPay structures an “invisible handshake” of cooperation to fairly sustain future production (because the invisible hand of traditional scarcity-based economics has no digital scarcity to ration). This forms a repeated game that encourages cooperation to continue a mutually beneficial game (one that that publisher can make as strict or loose as desired). Conventional subscriptions like the Times and Medium are 100% strictly publisher-controlled, while many membership models like The Guardian and PressPatron are 100% voluntary. FairPay shows how to get the best of both — reader participation in pricing, but subject to nudging incentives (some mix of carrots and sticks) to provide whatever level of control the publisher thinks most effective.
FairPay architects an engine for finding “the best convenience and value for the consumer” in a win-win way — for each consumer.
Ev, I hope you will consider moving in that direction. Medium could transform the world of publishing (and much more) if you do that right.
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Some related comments on your previous posts:
