Note to Rupert Murdoch and the Newspaper Barons

Newspapers must have idiots running their business department. Newspapers price their product in ways that no other retailer would even consider. The current system penalizes long-term subscribers and rewards new ones. For example, the WSJ offers a $119 annual rate to new subscribers and then tries to charge existing customers a $398 renewal rate. That's like Macy's charging its best customers more money for a dress while offering a new, unproven customer a discount. Either give everyone the same price, or offer a discount to the proven subscribers.

If I ran the show, I'd charge a higher initial subscription, say, $200 to $400 a year. Then, each year, the rate would become progressively lower until reaching a minimum of say, $50 a year. However, to get the discounted rate, subscribers would have to agree to disclose some basic personal information useful to advertisers, like gender, age, education, and marital status (not political affiliation or financial information) and to return one advertising survey a year (either online or regular mail). My system would benefit everyone: advertisers, who usually look to target a particular audience, would have better information; newspapers, which are begging for ad dollars, would be able to effectively market to specific advertisers; and subscribers would pay less money for the same product.

Also, newspapers wouldn't have to hire those annoying marketers who call at 9:01AM trying to forcefeed their product to someone who's already received six renewal offers by mail and two by email. Entire telemarketing teams would disappear, as well as the waste that occurs from multiple renewal offers. Newspapers would only have to send one renewal notice with the following message: either subscribe and pay within three weeks, or lose the discounted rate.

Isn't it shocking no one has tried this yet? What am I missing?

Barry Diller on Online Advertising

Barry Diller had an interesting interview today in the WSJ.

You really want to get a headache? Try to understand Internet advertising. Social networking advertising is being discounted because there is so much inventory [of available ad spots], and because methods have not yet been found to make it very effective. Will that get figured out? I absolutely believe it will. What form will it take? Absolutely unknown.

Mark Cuban seems to have found a potential solution/form in www.hulu.com