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The Trouble With News Bundles

Last week, The Information Editor-in-Chief Jessica Lessin suggested in a column that an aggregated news bundle on the cable model could be a solution to the news industry’s business model woes. An all-access pass could indeed be better for consumers and make for a more elegant web experience. And it isn’t going to happen.

Given the minimal marginal costs of serving content, a bundle makes a lot of sense. It offers the consumer better value and the publisher makes more money. But there is a big wrinkle in the formula: Until the volume of subscribers in the bundle is great enough to offset the reduction in average revenue per user, the bundle is a bad deal for publishers.

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There is zero value for the casual fan in an all-access news bundle because casual fans can already access the content they want without having to pay anything.