Brands in the News

The Chicago Tribune’s Premium-Edition Strategy

6 Jun , 2011  

Today the Chicago Tribune announced that it would be introducing a premium edition of its home delivery newspaper.

According to Crain’s, the Tribune will apparently now be available in two versions: the standard home delivery paper and a premium home delivery version with expanded content and features. The new version will be more expensive. You can read the Crain’s article here:

https://www.chicagobusiness.com/article/20110606/NEWS06/110609861/tribunes-expanded-edition-to-debut-june-15

The basic strategy seems to be fairly clear. First, reduce the quality of the core product in a bid to cut costs. Second, offer a new version that restores the quality at a higher price.

This approach can certainly work. Indeed, it is the formula that PepsiCo has followed at Frito-Lay with considerable success: gradually reduce the number of chips offered in each bag, saving money on product cost. Then, when each bag has only two or three chips, introduce a new “Big Grab” size with more chips and a higher price.

So will it work for the Tribune?

I am fairly skeptical.

I am very supportive of charging for content. Indeed, I think the only way a publication will make money these days is to have articles that people will pay to read. This is why the Financial Times is doing so well; the paper has terrific content and people happily spend to get it.

The Tribune’s approach, however, is likely to be very tough to pull off. The Chicago Tribune has a free on-line site and a free daily paper called Red Eye. Not surprisingly, fewer and fewer people have been buying the traditional print version. To solve this problem, the Tribune is introducing an enhanced version. So there will soon be an enhanced version, a standard version and a free version. This will be a nightmare to manage. The New York Times tried a similar approach with its website several years back and eventually abandoned the effort.

The likely outcome of this move: the heart of the franchise, the traditional delivered paper, will decline faster than ever. And the company’s troubles will get worse.

 Of course, this might be just one step in a broader strategic shift, so there could be a very smart and savvy play developing.

At the moment, however, it looks like a company struggling to fix a fading core business by introducing new products that make things much harder to manage. And this is rarely successful.


4 Responses

  1. Kobi Dwek says:

    Great post! I’d like to mention one big difference from the PepsiCo example: one a ‘high quality article’ (that is intended fro the premium version) is written, the marginal costs on adding it to the paper are very low, whereas reducing the number of potato chips per bag affects the cost dramatically. (I assume that the paper cost is negligible compared to the salary of a good content writer). So I would argue that there is an additional psychological hurdle for a reader to pay for the ‘regular’ paper, while not getting a few high quality articles that have been already written, making him/her resent the publication. Another way to think about it is that the introduction of a bigger chip bag doesn’t make the customer of the small bags less valued, while the introduction of a premium paper may make the regular-edition customer feel like a second tier customer.

  2. Cory Sorice says:

    What is interesting is that news is global, national and/or local and the news editors/publishers are getting pressure to chose strengths. Many like the Trib have to thin out the first two and focus on the third. The big question in my mind is how the right local publisher media brands become distribution for well funded international and national news agencies (e.g. WSJ, Washington Post, NYT) as well as editorial proxies for local news content creators (e.g. AOL’s Patch).

    Not sure a higher tier content site achieves greater creation synergies or increased local brand relevance.

  3. Jill says:

    As a former Trib employee, I can tell you that the move could be as much about satisfying writers as readers. Journalists are a vocal bunch, and as the public face of the newspaper, they often end up taking the heat for product declines. They are just as concerned with maintaining their individual brands as the Tribune is with maintaining its brand. When I was there, I was really surprised by how much the editorial department drove major executive decisions.

    • Tim Calkins says:

      Jill—I agree completely that personal branding is important for writers at the Tribune. Will this new edition help the writers? I could argue that both ways.

      Tim

Leave a Reply

Archives

Conversation Across the Site

  • Todd { Thank you for this insight, Professor. Students rarely have any insight into the mind of a professor or teacher at any level. Come to think... }
  • Mark Sheldon { Very interesting. Thank you and I think your analysis is generally correct. The one thing I would add is that in a small zoom class... }
  • Marty { Ford , built for change ? This is the company Hank almost bankrupted by refusing to replace the model T }
  • toddholscher { If Trump had the charisma of Reagan, instead of Nixon, it would have been different. Trump was easy to vote against for enough people... this... }
  • Emita Hill { Sobering but all accurate. Happy Thanksgiving, Tim. }
  • Mark Goldman { Disagree wholeheartedly. National unity and bringing back civility to our country is most certainly a benefit -- and a strong one. Trump's pitch on law... }
  • Read more Comments »

Collaborate with Tim

Tim helps companies around the world build great brands. To schedule a program or event click here. To learn more about Tim’s books, click here.