'USA Today' Online how 'not to do it'

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'USA Today' Online how 'not to do it'

While young World Wide Web sites relaunch regularly, changing visual and editorial features to lure eyeballs or strengthen a brand, four-month-old USA Today Online keeps tweaking another area of its service: subscription prices.

That's leading some analysts to say that the site's rollout represents what can go wrong with distribution of a subscription-based news service.

USA Today Online launched in April at $14.95 per month and $4.95 per hour after three hours. Six weeks later, prices fell to $12.95 per month and $2.50 per hour after three.

Now the majority of the service, which includes daily news as well as archives, is free to those with Web access. Those who want to use some of the site's enriched sports features pay the $12.95 fee and use a custom Web browser.

"I don't think anyone in my unit would say this has been easy," Lorraine Cichowski, VP-general manager, USA Today Information Services, said of the service's growth. "We are trying to get our price down and know that it's high."

Charging subscriptions on the Web has been a dicey game; getting consumers who already fork over money for access to pay more for content isn't easy.

But most Web publishers say their future business model depends at least in part on subscription fees. ESPN, for example, last week began charging $4.95 per month for access to much of its site, and hopes to land 100,000 paying subscribers by yearend.

Analysts said a national brand like USA Today, a 13-year-old newspaper with an estimated 6 million readers daily, could attract a wealth of users on the Web because of its prominence in traditional media. But its subscription plan turned out to be a major turnoff.

"Let's face it, the USA Today model was a real loser at $14.95," said Peter Krasilovsky, analyst at Arlen Communications, Bethesda, Md. "They'll have to keep the price going down. They also need more sponsorships."

"USA Today is now the model of how not to do it," said Adam Schoenfeld, analyst at Jupiter Communications, New York. "Their philosophy was flawed at the outset . . . and that may necessitate a reconfiguration. Most of the revenue on the Web is coming through ads, not subscriptions."

Ms. Cichowski said she and the advertising team for USA Today Online wanted to be "cautious" before signing advertisers.

The group wants to offer more user tracking before signing major deals; limited advertising will begin in October.

Meanwhile, USA Today isn't focusing all its attention on the Web. It will be a major content provider for Microsoft Network, which launched last week.

Copyright August 1995, Crain Communications Inc.

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