I spend a lot of time thinking about the future of news and its business models. And lately my thinking has boiled down to this: Television has a killer business model, with networks like ESPN and Bravo getting fees from distributors and advertising revenues. How does traditional print and digital news replicate the approach?
Well, the first question might be who are the “bundlers”—the equivalent of the cable operators that distribute and aggregate multiple channels. We talk a lot about bundles from the perspective of customer convenience. Pay once and get lots of channels.
But it’s an equally important and elegant model on the content creator side. It allows a network, like ESPN or the History Channel, to get an “affiliate fee” theoretically commensurate to its value in the overall bundle—often defined by the percentage of people who would churn out if it wasn’t there, or “marginal churn contribution.” But it also allows content creators to reach and make money from their “casual fans” too, the interested people who wouldn’t subscribe to those channels al la carte.
If you add advertising revenue—and in some cases, a direct subscription model—it’s as good as a business model gets. It’s also $150 billion a year in the U.S. alone.
It’s with that in the back of my head that I took interest in Apple’s new News app, announced at its developer conference WWDC Monday.