Price Discrimination at The New York Times
Are you a subscriber to the NY Times online? If you signed up recently, you might want to check your rate. You may be in for a better or worse deal depending on where you signed up. Take a look at my recent screenshots of their subscription landing page: https://www.nytimes.com/subscription
Here’s what I see while browsing in…
Frankfurt, $1/week (plus buy 1 get 1 free bonus):
Hong Kong, $1/week (plus buy 1 get 1 free bonus):
The screenshots above show a clear example of price discrimination by the NY Times–a tactic that is possible when a seller is able to identify various market segments with differing price elasticities, and then they are able to build a system to carry out the price changes. Price discrimination in practice is also is frequently referred to as “dynamic pricing”.
How is the NY Times able to identify different market segments?
One of the most significant factors affecting price elasticity, location, can be determined with first-party data, the visitor’s IP address. From the location, businesses like the NY Times are then able to adjust their prices to align with factors such as median income, willingness to buy news products, frequency of visit, device, among others. The end result for the NY Times is more revenue (from higher-income segments) and more accessibility (from lower-income segments). Who can complain about that?
As publishers and businesses of all kinds seek to shift their revenue mix from advertising to subscription revenue, consumers should expect the application of price discrimination, dynamic pricing, to be a much more common occurrence in internet-based businesses.
