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August 2016

Pricing Update at The New Yorker

NewYorkerUpdated Oct 9, 2016: The New Yorker updated its cover price again a few weeks back - it returned to $8.99 now. I've lost hope to make sense of it.

Given that my September 2015 post "Pricing at The New Yorker" is one of my most viewed posts to date, consistently garnering new views even almost one year later, I thought I'd give the quick update that The New Yorker has revised its newsstand price back down to the $7.99 level of early 2015, as you can see in the image to the left. As you can see in the original post, the newsstand price was $6.99 in September 2014, $7.99 in January 2015 and $8.99 in July 2015. While I felt $8.99 was too high, the opportunity to read any article by Jane Mayer should make the $7.99 price tag more palatable to non-subscribers, although personally there are quite a few New Yorker issues where I don't find anything I care to read, given all the other unread books and magazines I have. (Time is short, what can I say.) In fact I suspect the New Yorker business model is based on inane articles of utmost vapidity such as "Thoughts on my engagement ring" or (only marginally better) "Love in translation" driving traffic to fund hard-hitting, deeply important pieces of investigative journalism such as "Donald Trump's ghostwriter tells all". I suppose magazines do what they have to do to survive in this day and age, 

As a matter of comparison, I'm not sure what The Atlantic's newsstand price is, but a $24.65/year subscription is supposed to save you 65% of the newsstand price of this monthly magazine with 10 issues a year, so we are looking at a newsstand price around $24.65/(0.35*10)=$7.04 per monthly issue. The weekly Economist has introductory subscription deals of $12 for 12 weeks amounting to 87% off, putting the newsstand price around $7.69 a week. (The Economist website explains the savings are based on a $7.99 newsstand price, for which a $1/week offer for 12 week would correspond to a 87.5% savings.) This suggests a price point of $8.99/issue for a weekly magazine was too high given the other quality magazines that people can spend their money on. 

Ultimately I feel that the price increases were meant to push readers toward subscribing, but one has to be careful not to convince occasional readers instead that they should read the magazine at Barnes & Noble Cafe without paying for it and then go on their way. I also felt the previous increases had been too quick. It is easier for readers to understand a price increase if the price was at a certain level for a long time. But if a magazine increases its price several times within a few months, it just makes readers think that the magazine owners or managers did not know what correct price to charge at the beginning in order to maintain quality journalism.

As an analytics professional, I'd love to know what prompted the change. How much of a decrease in newsstand sales did the magazine see to motivate a price change downward? Were there decreases in airport newsstands sales (the kind where you can't read the article if you don't want to pay) or Barnes & Noble sales (the kind where you can browse through the magazine in front of a latte)? Was there pushback and if so, by whom? What is the trade-off between trying to get subscribers for the steady inflow of money (The New Yorker's approach to subscription renewal is automatic renewal unless you opt out) and introducing newcomers to the magazine? 

It'll be interesting to see if the price of The New Yorker changes again in the next year and if so, whether it is upward or downward.


HarvardXPlus

HarvardXplusHarvard recently announced the launch of HarvardXPlus, which offers MOOCs with limited enrollment, smaller cohorts and a "high-touch community" (their words). The fact that MOOCs haven't lived up to their hype - a finding from a 2015 study - should only come as a surprise to observers with the most superficial understanding of why people want to sign up for classes. In Clayton Christensen's jargon, what is the "job" a customer wants the course to fulfill when he signs up? It is not simply learning - traditional textbook publishers made that mistake when they tried to develop even fancier textbooks with online content and more. Most students don't want to buy a textbook to know everything there is to know about a topic. They buy a textbook to help them get the grade they want in the course, which might be A, B or C depending on their level of interest, total courseload and other commitments.

In the same fashion, people haven't been signing up for MOOCs for the pure joy of learning more - at least not the people that newspapers and MOOC platform owners want to write about as success stories, which typically involves a narrative of a poor student in a third-world country who is offered admission to a prestigious US university thanks to his or her extraordinary performance in a MOOC. (A minority of people will sign up for MOOCs for the fun of learning, but those are the least likely to be willing to pay for that extra knowledge, so they're not the ones who will help MOOCs' long-term financial stability. Those people tend to already have undergraduate and sometimes graduate degrees.) People sign up for MOOCs because they want a shot at a better-paying job and thus a better life. The content of a course may help, but so does the stamp of approval - even without a formal certificate - of succeeding at a course of Ivy League quality and developing a network of like-minded peers. MOOCs were always going to struggle in that respect because of the low level of interaction with the professor and the Teaching Assistants - peer grading by other students all over the world was problematic from the start, and those other students did not belong to the institution that so attracted enrollment in the first place. 

The next step in the long transformation of MOOCs is, I think, selective enrollment - because limited enrollment only makes sense when those spots are given to the most deserving students. If there is selective enrollment, there needs to be some sort of admissions process, although less is at a stake than if you applied to a four-year college. (It's only one course, after all.) Admissions process leads to an admissions committee, which leads to more overhead costs. The upside of this is that it would lead to a system where professors choose their students or students choose their professors through an online platform but outside the formal structure of a four-year degree-granting institution. (You do want an admissions committee to upload the criteria selected by the professors to avoid situations where eager students start contacting professors from all corners of the world, pleading to get into the course.) Some admissions criteria could be easy to implement without human intervention: you need to have successfully completed a traditional MOOC from the same platform, preferably in a related topic, to show you have the discipline to go through the material, for instance.

This then begets the question: why would professors want to work with students who are not from their institution, and online instead of in a traditional classroom? An answer might be the issue of scale. HarvardXPlus offers courses like: ChinaX Book Club: Five Novelists, Five Novels, Five Views of China taught by Harvard Professor David Wang and considering novels by National Book Award winner Ha Jin (one of my favorite authors), Nobel Laureate Mo Yan, as well as James Joyce Award Winner Yu Hua, Franz Kafka Prize Winner Yan Lianke and Mao Dun Prize Winner Wang Anyi. It sounds fantastic, but there might only be a handful of Harvard undergraduates every year interested in such a course. The HarvardXPlus concept allows the instructor to share his insights into "why literature matters so much in contemporary China from political, ethical, cultural, and gender perspectives" and methods for the "analysis of literary texts and cultural discourses" and "critical reading to modern scholarship" with more students. Those are important skills to have in today's society.

The ChinaX Book Club course is available for a fee, as seem to be all HarvardXPlus courses, perhaps to compensate for the smaller enrollment (although what represents "small" has not been defined). At $195, the fee is quite reasonable for 8 weeks of instruction given the quality of the works discussed and the fact that the authors are listed as co-instructors, giving participants hope to hear directly from them. Another 8-week course on the HarvardXPlus platform, Masterpieces of World Literature, has a fee of $495 that is perhaps a little high. (It might include licensing fees for some of the works to be read - the disclaimer states that the course is only available to students in the US, Canada and the Philippines for that reason.) It will be interesting for HarvardXPlus to analyze how enrollment is affected by the fee and determine the optimal price point so that the initiative is financially sustainable yet affordable for all interested.

What we are witnessing, I think, is a weakening of the role of the brick-and-mortar university as gatekeeper restricting access to professors. MOOCs allowed one-way access but enrollment was too large for professors to interact with more than a minuscule fraction of enrollees. With limited enrollment, we are moving toward online education enabling two-way access with professors providing a bit of feedback. This won't be the case here - the Masterpieces of World Literature website explains: "This course features increased assessment opportunities and personalized feedback from the HarvardXPLUS course staff on your academic writing. Your final project will contribute back to open learning resources that are reshaping the humanities today." For me it reads like "overworked TAs will read your work and your final project will be archived for posterity, aren't you glad", which is not the same as having Harvard professors provide feedback. But it is a step in the right direction.