0.0 Station Ident
Friday, 15 September 2017. For whatever reason, my brain's going a mile a minute and I have a bunch of stuff I'd like to write down, so... here are the things that I'm writing down.
1.0 It's Not Safe To Go Alone, Buy This
The other day when I was walking over to lunch I irreverently tweeted that I had "solved the subscription business problem for newspapers". I say irreverently because I wrote it in that internet dialect that uses lowercase to emphasize informality and understatement, opts to miss out punctuation and is, I don't know, some sort of signaling thing that says "hey, don't take this too seriously". Well, whatever. I still think it's a smart idea. (And other people agreed!)
Here's the longer version. My gut understanding of the whole 'newspaper business problem' is that, hey, newspaper subscriptions just aren't bringing enough money in to offset the massive collapse in revenues from print advertising when advertising went digital. There are lots of other things going on in the making-money part of the newspaper business, but for me the salient part was the understanding or assumption that newspapers would like to increase their subscription revenue.
Well! A New York Times subscription costs $9.99 a month and I like them because they're not weirdly passive-aggressive like The Guardian moans at you every time you read an article and there's that whiny footer. I happen to pay for an NYT subscription because, uh, I can justify both the NYT and the Washington Post as business expenses when they cover government issues?
Anyway. Normally (I am paraphrasing and dramatizing for effect), the conversation about newspaper subscriptions goes a bit like this:
Newspaper person: Hey, just subscribe goddamnit. It's only $9.99 to support quality journalism. Do you want journalism to die? Do you? You're happy to pay for Netflix, why the fuck won't you support news? Have you seen what's happening to the country?
Non-subscriber: Uh, it's super irritating that I've hit the 10 monthly free articles limit
(In fact, I actually just remembered that this *entire* chain of thought was precipated *solely* by seeing Sacha Judd tweet the following:
"People who tweet links to NYT articles without saying what they’re about, causing me to use up my non-paywall allowance, are the worst."
Sacha, this entire newsletter is your fault. EVEN WORSE, there's the non-zero chance that I only saw Sacha's tweet because it showed up in Twitter's In Case You Missed It product aimed at spinelessly increasing engagement, which makes this *entire* thing a tragic example of Media And Technology Turtles All The Way Down)
I am going to be not-mean to Sacha right now because I remember Sacha being the *exact* kind of person who *could* afford an NYT subscription, but hasn't. So I'm like: hey, how can we get Sacha to support quality fucking journalism?
Well, let's get back to the imaginary conversation. We'll pick it up with Newspaper Person:
Newspaper Person: Hey, non-subscriber. I bet you spend more than $9.99 a WEEK in just COFFEE. WHAT THE FUCK, non-subscriber?
Me: Hang on a second...
And that's where the epiphany hit.
See, I have no purchase intent when I hit the paywall. I mean, I get irritated that I can't go see this thing for free, but the deal is, my cognitive state is not open to buying something. It was open to getting something for free. I have just been frustrated. It is possible that I will fork over and FINALLY decide to get my subscription, but I suspect that most people just get frustrated. It's not that they don't *want* to support quality journalism, it's that they don't feel like buying it *right then*.
But! When else do newspapers ask you to pay for digital subscriptions? In newsletters and, well, when you're looking at the news. None of these times are really times when you're already predisposed to paying money!
Hang on. Something about coffee.
Me: OK, here's how we do it. Let's *literally* use the coffee example, because the insight here is that every time we have this conversation, we talk about how people spend *lots of money on coffee repeatedly and habitually* and *do not at any point end up buying newspaper subscriptions*.
So why not just sell digital access to news as an upsell or as a marginal transaction?
The way I wrote this on Twitter was like this:
"Announcing NYT x Starbucks, the first of a new line of partnerships from The New York Times. For an extra $3 when buying your coffee, you unlock 7 days free access to the New York Times. There's a punchcard, too: get a total of 3 NYT punches at Starbucks (ie: a spend of $9) and you unlock access for the rest of the month."
In other words: buy your paper with your coffee. Just like your dad used to.
This would only work if the following things are all in place:
* there's pre-existing purchase intent that's already been acted upon (you're already buying some coffee)
* Starbucks has a non-shitty EPOS stack that NYT can hook into and you can design a super easy flow from the $3 upsell to access. This is not impossible, it's just hard
* Starbucks actually wants to do it
* The New York Times is not a stupid legacy organization
* Reach - this is only worth doing everywhere with the requisite foot traffic and transaction volume right?
But mainly it's the ability of the digital platform Starbucks uses for retail transactions to be flexible. There's an argument that is at least somewhat flexible, because the Starbucks app exists and they're not as bad as they could be at digital. (In fact, Starbucks have historically been pretty good at digital).
But! This is the only beginning, right? Starbucks works because they have reach *and* a pliable digital retail platform, point of sale. But who else could have reach?
Square. Because your indie coffee shops aren't Starbucks, but they *might* use Square as a non-shitty EPOS. And as a product, Square having a platform to offer digital upsell with retail transactions is, pardon my ego, a really good idea. But why bother doing it if there isn't a clear, large-scale reason to do so? That's what an organization like the New York Times would provide.
One of the questions at this point is: why would Starbucks do this? What's in it for them? To which there are some facetious answers and some more proper answers. The facetious answer is: Starbucks *already* sell newspapers. They *already* use retail space to sell the New York Times.
The more proper answer is that this is, uh, a monetization strategy for Starbucks that *could* provide genuine value to their consumers, but *would likely* [citation needed - would the marginal transaction divert dollars that could've gone to Starbucks to the New York Times or other digital partner? I don't know! Let's find out!] increase revenue. Because the digital platform that allows for the upsell is the equivalent of shelf space in a retailer like WalMart: vendors will pay for access. In fact, vendors might even pay for development - Starbucks would be smart to get NYT to assume the risk in development for prototyping the platform because the potential upside for the NYT is business-saving, whereas it's just a cut of transaction dollars for Starbucks.
The Twitter thread includes a public conversation about this with Andrew Losowsky who raises a number of issues and we have a fun time discussing them. Of course, the newspaper org's goal is always going to be recurring subscriptions, not frequent opt-ins buying access a week at a time. But, you know, you can handle that at the access end and try to (gently) make it easier to convert to a recurring subscription for the people who pay for and access content this way. There's also a nice angle here because it brings back the physical act of paying for news, and from the journo point of view, it looks like the *more* interesting thing here is that it could provide a local route for local news organizations, which is where it gets super interesting from a bottom-up point of view.
So: long story short. For a problem like newspaper subscription, think about how prepared or primed users are for the action you want them to take, and consider if the interactions that you *already* have with them are actually any good for that financial transaction. This has always been a big problem because, hey, there aren't that many *online* situations where you're primed to pay money like that because most stuff on the 'net is free. Again, this only works *if* you have an internet-connected electronic point of sale platform and you realize that you could fight for including your transaction as an upsell alongside other transactions where your marginal cost is sufficiently small that it feels like, well, "another coffee".
Normally I write this stuff and just throw it out there as a "hey, someone should do this", but *this* time, I'm asking you - if you work in the dead tree news business or know someone who does and you also agree that this is a smart solution to the subscription problem, then *get in touch with me* because I kinda want to work on this. It ticks many boxes: news is an important thing for a functioning society, so making sure it's funded is important; understanding people and their interactions with systems is catnip to me; digital platforms that actually live up to their potential and solve real problems *and* leave the world a better place are like a trifecta of awesomeness.
And: this isn't *impossible*. It's just *hard*.
Oh right if you work at Square and you know who to talk to to persuade them that they should do this, then *let me know*. Because duh they should do this.
And then aside from all of that, *this is how my brain works*, so if you have a kind-of digital problem and no-one else is good at solving it then this has gone A-Team really quickly and I did not intend it to go that way.
 Dan Hon on Twitter: "hey everyone I think I solved the subscription business problem for newspapers 1/"
 Sacha Judd on Twitter: "People who tweet links to NYT articles without saying what they’re about, causing me to use up my non-paywall allowance, are the worst."
 Andrew Losowsky on Twitter: "@hondanhon Through the Starbucks app too."
2.0 Post Credits Sequence
For reasons that are literally too amusing to even type out, I'm going to be taking part in two things over the next couple of months, both around artificial intelligence, the economy and the future of work. I'm very flattered to be invited to take part in both of these things and also to the people and friends who have helped remind me that being interested in and having defensible, useful opinons about people, systems, and how people and systems interact with each other is actually a useful thing.