When no one wanted to pay for music anymore, iTunes got wallets to open up again by enforcing a strict 99 cents per song rule. Just as important as the price point was how straight forward the system was: consumers didn't have to fret about complicated price structures, just one, simple, flat rate.

For the more diverse array of content offered by a digital newspaper or magazine, a tiered system makes more sense. But publishers should favor only a few digital subscription options, rather than divying up content into too fine slices.

The Times makes a misstep by forcing subscribers to choose between the iPhone and the iPad app or pay a steep $15 dollar premium to get access to both. The subscription packages look like this:

$15 for Web access + smart phone app.

$20 for Web access + iPad app.

$35 for All of the above.

This system overcharges for an isolated iPad experience while giving away the smart phone app with the most basic web plan. Instead of frustrating iPad customers by denying them the smart phone access, an alternative would be to give iPad customers all access, while charging Web only subscribers more to get in the app game. i.e.:

$15 for Web access

$20 for Web access + smart phone app.

$30 for All of the above + iPad.

With this plan, the $20 option looks the most appealing (as opposed to the $15 option in the Times system) and each moderate increase in price gets you more and better content. A more palatable payment plan = happier consumers = more money to be made. Simple math.


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