The Strange Pricing of Digital Goods

I buy a lot of digital goods and services but I’ve noticed that there is no consistency in pricing.  For example I subscribe to Rdio.com and pay $4.99 a month for access to millions of songs and albums.  Yet, The New York Times wants $15-$35 a month for access to just one newspaper.  $60 a year for 15,000,000 songs versus $180 for 365 issues of one newspaper – can you spot the obvious bargain?

Yet for $7.99 a month, or $96 a year I get access to 75,000 movies and TV shows at Netflix.  $7.99 a month is also the price Hulu Plus charges for thousands of shows too.  So why does one newspaper cost $15 a month, especially since it was free for years.  I love reading The New York Times, but I can’t make myself pay $15 a month for it when I get so much music for $4.99 a month, and so many movies and TV shows for $7.99 a month.  If I was getting access to several great papers for $7.99 a month I’d consider it a fair deal.  But for one title, I think it should be much less.

This makes The New York Times appear to be very expensive.  However, The Wall Street Journal is $3.99 a week, or $207.48 a year. Strangely, The Economist, a weekly is $126.99 a year for print and digital, or $126.99 for just digital. Go figure.

I also get digital audio books from Audible.com.  I pay $229.50 for a 24 pack, which is $9.56 per book, but they often have sales for $7.95 and $4.95 a book.  I can get two books from Audible for what I’d pay for 30 daily papers, but I actually spend way more time listening to books than I’d spend reading the paper online. 

I subscribe to several digital magazines through the Kindle store.  Right now I’m getting a month of The New Yorker for $2.99, but that’s suppose to go up to $5.99 soon.  (What is it about stuff from New York being more expensive?)  Most of the magazines I get from Amazon are $1.99 a month, way under the cost for a printed copy at the newsstand.  The Rolling Stone is $2.99 and I usually get two issues in a month.  So for $15 a month, the price of The New York Times, I get 11 magazines (4 New Yorkers, 2 Rolling Stones, Discover, Maximum PC, National Geographic, Home Theater and The Magazine of Fantasy and Science Fiction).  That’s a lot of reading for $15 a month, and a lot of variety.

However, I also subscribe to Zite, an app on my iPad where I do the most of my news reading, and that’s free.  I get free articles from those magazines above and who knows how many more, all for free.  In fact, I spend so much time reading Zite, because it’s customized to my interests, that I’m thinking of cancelling my magazine subscriptions.  But that’s another issue.  Like when I subscribed to paper copies of magazines I mostly let them go unread.

Even if I paid $15 a month for The New York Times I’m not sure how many articles I would read above the 10 articles a month they offer now for free.  I don’t expect everything to be free on the internet, but sadly, paid content has to compete with free.  Zite, which is free, is actually worth $15 a month, because I get access to zillions of magazine articles, newspaper stories, and web blogs.

I’m also a subscriber to Safari Books Online, a subscription library to technical books.  I pay $9.99 a month and get to have 5 books a month “checked out” to read.  I can keep them longer, but I have to keep them at least one month.  So for $120 a year I get to read as many as 60 books, which means the price could be as low as $2 a book.  That’s a bargain when most computer books are $40-50.

And I’m a member of Amazon Prime.  For $79 a year I get unlimited 2-day shipping, access to 12 ebooks (1 a month from their library of 100,000 titles) and unlimited access to thousands of movies and TV shows.  This is another tremendous bargain.  I also buy ebooks for my Kindle and iPad from Amazon.  Costs run from free to $9.99.  On very rare occasions I’ll pay more, but it hurts.  Digital books just seem less valuable than physical books.  I don’t feel like I collect digital books like I do with hardcovers.  I don’t even feel I own ebooks.

Next Issue Media is now offering a library of digital magazines Netflix style for $9.99-$14.99 a month, but only one of the magazines I currently subscribe to, The New Yorker, is part of the deal.  If all of my regular magazines and The New York Times were part of the deal, then I’d go for it.  However, Zite with it’s intelligent reading system would still dominate my reading.  Flipping through magazines is just too time consuming.  What I want is a Zite Plus, a service that provides access to all the free and paid content I like to read.

Can you spot the trend in all of this?

I think most people on the net are willing to pay for digital goods if they get a bargain, especially if it’s part of a library of goods like Netflix, Rdio, Rhapsody, Spotify, Hulu Plus, Safari Online, Amazon Prime, etc.

And there is another issue about buying digital goods.  Some companies charge extra if you use their content on a smartphone.  Rdio and Spotify are $4.99 a month for listening on your computer but $9.99 a month to also listen on your smartphone.  The New York Times is $15/month for reading online and smartphone, $20 for online and tablet, and $35 for online, smartphone and tablet.  Why the heck is that?  It’s the same damn words.  Why would they care where you read their paper.

Netflix charges $7.99 a month and you can watch it on a whole array of possible devices.

JWH – 4/24/12

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