Why Every News Site Should Focus On Being First Class All The Time

from the business-class-my-ass dept

Capitalist Lion Tamer was the first of a few of you to point out the rather interesting analysis by Oliver Reichenstein about the idea of creating a "Business Class" freemium operation for news. The basis of the post was a discussion Oliver had with a media exec about paywalls, in which Oliver came out against them and explained his reasoning (which we agree with) and the exec countered with the "business class" analogy, leading Oliver to rethink his position a bit:

He asked me what I think about pay walls. I told him what I always say: The main currency of news sites is attention and not dollars and that I believe that it is his job, as a publisher, to turn that attention into money to keep the attention machine running. He nodded and made the following, astonishing statement:

I can’t see pay walls working out either. But we need to do something before we lose all of our current subscribers. Sure. It’s a tough business environment, but… But the flight industry is a tough environment too, and they found ways. So tell me: Why do people fly Business Class? In the end, an airplane brings me to the same place regardless of whether I fly Economy or Business Class and the massive price-increase I pay doesn’t compare the difference in value.

He asked whether I knew of a way to apply this logic to online news. What would a Business Class news site look like?

People pay for Business Class because they don’t want to be tortured in Economy. They get faster lanes at the terror check. They get an extra glass of champagne. The stewards are more attentive. They get off the plane more quickly. They get the feeling of a higher social status.

And he added that he wished that there was a way to lead each reader through the business class to Economy again and again to show him what he misses.

It's an interesting idea, and Oliver runs with it, and he plays around with the idea of what a "Business Class" version of the news would be, and comes up with a design that does away with ads and presents the information related to the article in a much nicer manner: Click on Oliver's original article to see a much larger version of the graphic, as well as the rest of his discussion on it. While I was thinking about this post Mathew Ingram beat me to the punch (as happens way too often) and wrote up an insightful post about this story as well, pointing out that some third parties, like Flipboard and Zite, could represent the kind of "Business Class" for news that Oliver and this exec covet. However, he also points out that the metaphor of airline travel to news consumption doesn't really work:

One of the big issues with the “business class” metaphor, however (like the “iTunes for news” analogies that were popular not so long ago), is that news simply isn’t like air travel at all, in some pretty important ways. To take just one example, you can only fly one airline at a time, and you can only go to one destination at a time. The rise of RSS readers, and more recently, Twitter and other social-reading tools such as Flipboard, Zite and Tweetmag allows people to read multiple sources at a time, and that is one thing that the IA design approach doesn’t really take into account.

I actually think Mathew's understating the problem with the "Business Class" for news concept. Thinking of things that way runs into all of the same problems that I think many "Freemium" models run into for online services: specifically, if you're basing your business model on creating a "class" of services that annoys your users quite a bit that they're forced to "upgrade" to the less annoying option, you have to be pretty damn sure that they can't just go and find the less annoying version next door. Or in the next thousand doors.

In the airline world, you have limited choice and limited competition. And, even then, the rise of airlines like JetBlue and Virgin America in the US have really been based around the idea of making coach class not seem quite so awful, and passengers have flocked to both airlines because of it. But that's still a limited market. Open it up to a nearly unlimited market, and you've got a problem if you're focusing on "business classing" the news. When you do that, you are really opening up a massive opportunity for someone else to offer a First Class (not just Business Class) experience to everyone without the paywall... all while you're wasting energy trying to make sure the Coach Class sucks enough to get people to pay to upgrade. Instead of paying to upgrade, they're more likely to jump to the other guy's (free) First Class option, leaving you with a lot of wasted effort on trying to make your Coach Class suck.

The incentives are all wrong.

The opportunity, in the competitive market, is not to focus on offering a class that sucks to get people to sign up for a better class. It's to make the best class all around, and continue to improve it to keep your community as happy and loyal as possible... and then build a business model on top of that.

Filed Under: business class, business models, journalism, paywall