The Daily News of Rhode Island is hurting, like every newspaper, but at least this is thinking outside of the box:

The Daily News will now charge $145 annually to a newspaper subscriber, $245 if a subscriber wants the paper and access to the paper's web site--and, here's the key figure, $345 if the subscriber only wants the web site.

So if you only want the website, the Daily News will pay you $100 to take the newspaper. You don't have to read it. You don't have to look at it. You can toss it, use it for fish wrap, or just blanket yourself in the local business section like a paper Snuggie. Could this possibly work?

The Economist sees behavioral economics at work. What I see is a whole bunch of crazy. There's a sensible way to bundle, and that is to do what the Wall Street Journal does, along with every other merchant in the world. You charge X price for Product A, Y price for Product B and a price just below (X+Y) for Product A +B. Instead, the Daily News is thrusting their newspaper at consumers like a bazar peddler with "antiques." Even if the combo is a good deal, could it look any more desperate?

For advertisers, the model is also a little backward. When a publication goes to advertisers, it wants to brag about how engaged their audience is. That's one reason why Newsweek is in the process of cutting its rate base (that is, the circulation you can guarantee to advertisers). It wants to whittle its audience down to about a million of its most dedicated (and, ideally, most affluent) readers so it can tell advertisers: "Our audience is the smartest, richest, most dedicated audience your going to find in the newsweekly space. Would you like the spot next to Fareed or Jon?"

And the Daily News? Their lucky sales team gets to go to local Rhode Island firms with this pitch: "We've bribed our audience to accept the newspaper you're about to advertise in. Just think! Pages with your company's name will be lining trash bins all over the great city of Newport. Would you like a page in the Metro or Sports?"

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