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Consumer Reports, A Paid Online-Subscription Model

The New York Times has an article today on how Consumer Reports online survives from paid subscriptions, while the prevailing wisdom is that people will not pay for online information. Here is an excerpt:

For a decade, however, Consumer Reports has charged Internet readers the same price as print subscribers, currently $26 a year (or $5.99 for a month’s online access or $45 a year to get the magazine both in print and on the Web). While the rest of the industry sees print readers as more valuable — because advertisers do — Consumer Reports actually makes more money from readers on its Web site, because it avoids printing, trucking and mailing costs.

“It’s not like we’re a stroke of brilliance,” said John Sateja, senior vice president for information products at Consumers Union, the nonprofit group that publishes Consumer Reports. “We had no choice. We have no advertising, so we had to survive on what readers pay.”

The organization does more than just survive. Consumers Union reports that its publications — Consumer Reports and a few much smaller ones — generated $208 million in revenue in the year ended May 31, with an operating margin of about $28 million.

A colleague in the Coles Business School at Kennesaw State University has a cartoon on his door. One panel of the cartoon says Information $1, the other says Information you need $500. I subscribe to Consumers Reports, but only use it a few times year. I am using it now for example as  I plan to buy a flat screen plasma TV.  I also am part of its information  sharing community in that most years I take the magazine’s annual auto and appliance reliability surveys.

This post also gives me a chance to remind readers that the Representative Journalism idea is alive and well, but the blog is being a bit neglected as I work on how to apply this concept. A backer is showing some interest. Maybe in the not too distant future I will be able to reveal more information.

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    Leonard Witt

    Leonard Witt is the Robert D. Fowler Distinguished Chair in Communication at Kennesaw State University and the chief blogger at PJNet.org.

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