With all the talk from newspaper moguls about making the public pay for online news, it might do the industry titans well to check out their cable bills. And the latest earnings report for Comcast versus their own.
There's a lesson in the tangled collection of charges Comcast hits its customers with. I called one night recently about my $195.58 monthly Comcast bill. That's for service to two TVs and so-called "high-speed" Internet. So I'm paying the cable company roughly $2,400 a year, when I pay roughly $770 for seven-day delivery of The New York Times.
The gap seems way out of line. But it also helped make sense out of last week's earnings reports. "Profit at Comcast increases 53%, largely on higher prices," reported an Associated Press story on The Times' Web site. I'm sure the newspaper moguls wish they could report similar good news. Instead, the Times is selling off assets to survive.
One of the main solutions of Murdoch and other newspaper big shots for industry woes is to make users pay for online content they're already getting for free. Maybe they should take a look at their cable bill and try a different approach.
Comcast dings me first for standard cable (think the daily newspaper). That costs $55.99 in Denver. Can you imagine if the newspaper could get half that for a seven-day subscription? Raising the street price of the daily paper to 75 cents from 50 cents is too timid. A decent newspaper should easily cost a buck. The Times is right to be at $2.
When I called to cancel my local paper (The Denver Post) recently, the representative put up little fuss. Had I thought of Sunday only? he asked. Wouldn't I miss the coupons? I could get the e-edition the other six days. Wow! Exciting. Not a word about the value the paper can add through special services. Not a mention of what it could deliver to my cell phone or the cell phones of the four others in my household on my Verizon family plan. (OK, they don't all live with me, but they all have a connection to Denver.) Not a word about text messages. Or e-mails. Or special packages of news. Or any benefit other than the print newspaper.
You can be assured that Comcast isn't satisfied with a "Standard Cable" order. And I guarantee you its agent, unlike the newspaper person, started scrambling to fix my package when he learned I was unhappy with what I was paying. He wasn't about to lose me and even told me where to call on a weekday to get my price lowered. (Of course my immediate thought was that the company had been happy to charge me to the hilt until I raised an objection.)
Comcast also gets me for the "Preferred Package." That's $16.95.
Then I get Dvr/hdtv. That's $15.95.
I like HBO. That costs me $19.99.
I get STARZ, too. That's another $19.99.
Then I get the Digital Additional package, for $6.95.
So my total, before taxes, for cable television is $135.82. Ouch!
Then comes high-speed internet. That takes a bite of $45.95. The reason I put quotes around "high-speed" is that the agent was immediately willing to double the speed of my service without charging me a penny. (How come I didn't get the real high-speed without asking?)
Then comes $13.81 in taxes. (We would have been happy to get that much for a newspaper subscription most years at the Rocky Mountain News.)
That brings me to the total: $195.58. And the question for the newspaper industry: Is there really nothing more you can bundle into your bill? Can you not offer deeper services than a basic subscription that will make my life better? If you could - and I believe you can - wouldn't that help alter your economic equation? Couldn't many newspapers make money from new revenue streams, if they would only create content or services people would be willing to pay extra for and then charge them for what they want.
This is why I think the membership model is so much better than the subscription model. Not just the museum-style membership package the Times is apparently considering. Not that that might not help, somewhat. But there's so much more it could do.
Would you pay extra for a membership if it would save you money? I do. My family belongs to Costco. If customers see benefits, they're willing to pay. Which is why just focusing on getting people to pay for news online is so narrow-minded. And why the incremental pricing model of Comcast is such a smart approach.