20 July 2009

Internet Pricing

A.D. Freudenheim, The Editor

I’m no pricing expert, but it seems to me that the world is waiting for someone to come up with a better internet retail model. At the moment, internet access in the average “coffee shop” seems to work in one of two ways: the high-priced service model, as at Starbucks, or the free-and-open model, as with chains like Così and other places, including many independent stores. As much as I appreciate free internet, neither model makes much sense. In fact, the free access approach isn’t even necessarily beneficial as a patron, since it can change customer behavior for the worse.

On the pay-for-use side, the Starbucks model is expensive, especially if you need just enough internet time to accomplish something meaningful, and not so much that it's a day’s investment. Starbucks has contracted the service out at AT&T, which in turn has an aggressive pricing model. I suppose they charge what the market can bear, but in all likelihood this just pushes users towards mobile devices that either have free access because of an existing corporate relationship (as with the iPhone at Starbucks, through AT&T) or use external systems (like the BlackBerry). And this is all fine and well—as long as a mobile device will do what you need at that moment.

On the other hand, the free-at-Così approach represents a lost opportunity. Customers can order a $3 coffee and stay for three or four hours, long after the coffee is gone but while the free internet is still working. Indeed, I have spent a fair amount of time at a nearby Così this summer [side note: get espresso drinks, avoid the brewed coffee] and have observed this behavior first hand. Moreover, at my local Così, the space is big enough that I have seen people eating food from other restaurants, unnoticed by staff, while using the internet. Hmm.

It would make a lot more sense to find the middle-ground of these two approaches: purchase-driven, time-based “token” access. Here’s how this would work: buy anything the store sells, get free internet access for up to an hour; your access code would be printed on your receipt. Want another hour? Buy something else: a cookie, another coffee, maybe even lunch; get another receipt and another hour of access. This would entail a logical recognition that coffee shops are not in the internet business, they are in the food-and-hospitality business. Providing internet access makes good sense from a hospitality perspective, so use it hospitably: as an incentive to food and beverage sales while also avoiding a world full of freeloaders. Moreover, stores could tweak this process during peak hours (like lunchtime), to reduce the available internet duration to a half-hour. That would encourage the hangers-on to hang-on for a reason, while making room for paying customers when someone is just mooching internet service.

Starbucks has sort-of moved to a better, scaled model, via it’s reward card, providing two hours of access per day if you make one purchase per month. There’s another trade-off in here, in the form of all the info you give to Starbucks via the card. But Starbucks also seems to have missed the point: by limiting the customer’s internet access, they’re just driving revenue to AT&T, while doing nothing to incentivize onsite purchases from Starbucks itself—because additional purchases won’t increase the amount of free internet time.

I’d be just as happy avoiding chain stores, but many of my local spots (like Georgia’s) don’t offer internet access at all, perhaps because they are concerned about the costs, or the perception that there’s not much benefit in having a bunch of freeloading internet users around. It’s a shame. Seems to me local cafe culture could really benefit from an overhaul in the pricing models, which would be good for business and good for the customer, too.

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14 July 2009

Thanks to...

...the ever-depressing Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations. If this report from the New York Times is accurate, Hoenlein continues to represent the rear-guard of thinking on Middle Eastern and Israeli issues, while continuing to reinforce the fiction that he and his organization are actually representative of the broad perspective of American Jews.

Let me just say, once again - and as if it isn't obvious from what I've written in this space over the last 9 years - that the Conference of Presidents of Major American Jewish Organizations does not represent me. Its title notwithstanding, these are self-appointed grandees, coming from organizations whose interests and attitudes are usually far from mine, on issues ranging from Israel to Israel-and-New York to anti-Semitism.

So, despite what I wrote about then-Senator Obama back in 2007, when he gave a speech to APIAC: if his attitude, reasoning, and words as reported by the Times are true, then there may be hope for a successful Israeli-Palestinian peace process after all.

And kudos to J Street and its executive director, Jeremy Ben-Ami, for becoming enough of a powerhouse countervailing force to get a seat at the table during these discussions. That speaks as much to the change within the American Jewish community (and the fading of an older, long-entrenched generation) as it does about the openness of the Obama administration.

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09 July 2009

Newsweek vs.

A.D. Freudenheim, The Editor

In the July/August 2009 issue of The Atlantic, Michael Hirshorn presents a compelling analysis (“The Newsweekly’s Last Stand”) of why a weekly magazine like The Economist is succeeding just as others, notably Newsweek, face increasing difficulties. His essential argument—that The Economist offers a glimpse of the broader world, consistently every week, and that in doing so has defined a niche that the other magazines do not have—rings generally true. Indeed, one reason why I remain a dedicated subscriber is precisely because of The Economist’s wide scope.

However, Hirshorn overlooked another big reason why some folks (like me) appreciate The Economist: intellectual and reportorial honesty. Not objectivity, but honesty. A couple of years ago, CNN news anchor Campbell Brown was on The Daily Show. At one point during the interview, Brown commented to Stewart on one of the problematic aspects of American journalism, noting that a reporter should be able to take two contradictory comments and then report on what s/he sees as the one most connected to reality. But (as she noted) most American news outlets don’t practice journalism in that mold. In addition to the (theoretical) firewall between the publisher and the editors and reporters, American news media have long held that the editorial opinion of a news outlet should be expressed primarily through editorials, or through the voices of those labeled “critics.” The actual perspective in any reporting function is intended to be weak-to-non-existent. News should be “objective,” but not expressly honest. So, in Brown’s example, confirming that it is raining—when someone tells you it isn’t—falls out of normal journalistic scope.

The problem, for me anyway, is that such objectivity cannot exist; instead what happens is an adoption of perspective through subtler and more damaging means, even if inadvertent. News media become identified with one side of the political spectrum or the other, inevitably, and based upon inferences drawn from things like words used (e.g., “terrorist” vs. “freedom fighter”), how information is presented (since context can make a fact seem less factual), or the identities and perspectives of sources interviewed for stories. Where editors seem to consider this “objective”—letting the news outlet be, in effect, an amanuensis for the information coming from different sources—it is impossible to make such information work in a way that doesn’t do a disservice to the underlying news, or to the news consumer. It is a problem as much with television and radio news as with newspapers and news weeklies.


Such is the environment in which I read The Economist’s story about drug policy (“At last, a debate”) in the 25 June 2009 issue, which struck me as the perfect example to illustrate the opposite of this hidden American journalistic perspective. The article says (in part): “But he also implies that proponents of drug legalisation—who include The Economist—are really seeking fresh sources of tax revenue to rescue failed banks. (No, Mr Costa, to pay for drug treatment and education.) Grotesquely, he equates legalising drugs and human trafficking. (Drugs primarily harm the user whereas trafficking harms others.) He claims legalisation would “unleash a drug epidemic in the developing world”. (That is what prohibition is achieving, because the criminal gangs it generates in developing countries have started supplying their local markets.) He smears his critics as “pro-drug” (as absurd as suggesting he is “pro-crime”). This kind of hysteria smacks of an organisation that is not just losing an unwinnable war but losing the argument.”

Thus, in the article it is clear that The Economist has a perspective on the issue (it is for legalization); that it believes it has thought through the ramifications of this perspective; and that it sees a particular kind of weakness in how one international organization has been managing and responding to the issue. Just as importantly: as a reader, one understands the intellectual terrain in which such reporting takes place. This piece was also related to a story about coca eradication and the cocaine trade in South America, and here too the direct approach holds: as (for example) the writer notes that programs to spray coca to eliminate it have a negative effect on Colombian’s ability to grow food, too. These aren’t editorials, or bylined critiques of drug policy issues; this is normal reporting.

Often, the way this plays out in The Economist is on a very small, simple scale: the use of direct language that addresses the implications of the information just delivered. No attempt is made to hide the impact of the absurd inflation rate in Zimbabwe; a reference to it is likely to speak directly either to its mathematical absurdity or its impact on average people. A story about global warming takes for granted the value of environmental conservation—which means that individual stories about everything from policy discussions to new scientific discoveries can be understood as coming from a specific perspective. And so on.

No American media outlet can turn itself into a version of The Economist until it is willing to see that even reporting must speak truth to power and to readers—and do so directly, not obliquely and not “objectively.” The growth of published opinion pieces, in one form or another (in print, online, or as a mainstay of cable news), mirrors the exponential rise of “user-generated” content, most of it highly opinionated, through a range of sites and blogs (like this one). Indeed, news outlets like Newsweek are increasingly relying on their own blogs as a means of providing faster content than a print edition can deliver, and with a specific slant, as in this piece about drug policy issues. Still, what is missing from all of these is the combination of the essential elements that makes The Economist work: on the ground reporting mixed with interpretation of the report, delivered in direct and unambiguous language. Say what you mean, and know why you mean it—because with that as a motto, it’s much harder to go wrong than just including “all the news that’s fit to print.”


An ironic coda to all this: as I was researching this piece and combing through Newsweek’s web site, one advertisement in particular kept catching my attention: subscription ads for The Economist.

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