Unbundling The Digital News Media

The print newspaper can be looked at a bundled service from two levels. First, it can be paid for through a subscription or paid for per paper in the newsstand. Second, the newspaper for the day is a bundle of multiple sections and stories covering a wide variety of topics and appealing to multiple customer segments.

The simplest level of unbundling follows the first kind, selling only individual papers. But a more interesting type of unbundling is selling individual stories, some of which could be priced as much as, if not more than, the price of the newspaper itself. With print medium, the physical limitations prohit unbundling along this dimension. However, the same is easily doable with the digital version of the newspaper.

In his Miami Heral column, Professor Wasserman of Washington and Lee University talks about this unbundling as a solution to Ad-Free journalism,

Modern computing offers unparalleled capacities to track and calculate. Imagine a vast menu of news and commentary offered to you ad-free for pennies per item, the charges micro-billed, added up and presented like a utility bill at month's end. The money that journalism providers got would depend on their audience.

The distribution solution is technologically possible but it requires a common and feasible system for payments, especially when the prices are lower compared to today's transaction costs. As part of this study we will look at the impact of transaction costs in unbundling services and innovations that can address these risks.