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March 4, 2010, 12:16 p.m.

Washington Post gauging readers’ willingness on paid content, both on new iPhone app and on the website

The Washington Post caused a bit of a stir yesterday when it announced a $1.99-a-year iPhone app. The choice was interesting both because it offered time-limited access to content and because of the low price point — at a time when other newspaper execs are apparently debating prices more than 100 times greater. As our friend Mac Slocum put it: “$1.99 for 12 months of Washington Post content — is that *too* reasonable?”

This morning I spoke with Goli Sheikholeslami, the vice president and general manager of digital operations for The Washington Post. She said that the Post isn’t thinking about the $1.99 a year as a moneymaker in itself.

“It’s not really so much about this from the point of view of a large revenue stream, but trying to gauge how our readers react to paying for content,” she explained. “It really provides us with a platform for experimentation.”

Why $1.99? The Post considered it a price iPhone users are accustomed to paying, so they’d start there. I asked Sheikholeslami if, beyond the annual subscription fee, there might be other premium content available for in-app purchase. Sports Illustrated’s free swimsuit app has generated a lot of $1.99 purchases inside the app for more bikinis. And Rodale has had success selling additional content within its workout apps; one in three users buys additional content within an app.

“That model does sound like a sound one,” Sheikholeslami said. “Offering a product for free and then a premium product inside of it might be something we’d consider. We might want to test around and see if that model works.”

What about online? Is the Post priming customers to pay for the Post’s online content?

“Right now we don’t have any sort of immediate plans [to charge for web content], but we’re definitely thinking about what new products we can create, including on the web,” Sheikholeslami told me. “If it makes sense to charge for it, we would.”

In addition to the subscription fee, the Post’s new app includes a prominent splash-page ad and display ads throughout the app. Some have argued that advertisers might find an audience that’s paid for digital content more attractive to advertisers than one that is surfing freely. But Sheikholeslami told me the ad strategy isn’t connected to the subscription model.

“I wouldn’t say it’s more or less attractive. From an advertising perspective we do think we can attract a sizeable audience, even with a paid iPhone app,” she said.

POSTED     March 4, 2010, 12:16 p.m.
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