Introduction

Overview

The Internet has emerged as a new channel for the distribution of digital information such as software, news stories, stock quotes, music, photographs, video clips and research reports. However, providers of digital information goods are unsure how to price, package and market them and are struggling with a variety of revenue models. Some firms, such as America Online, have succeeded in selling very large aggregations of information goods – literally thousands of distinct news articles, stock reports, horoscopes, sports scores, health tips, chat rooms, etc. can all be delivered to the subscriber's home for a flat monthly fee. Such aggregations of content would be prohibitively expensive, not to mention unwieldy, using conventional media. Others, such as Slate, have made unsuccessful attempts to charge for a more focused “magazine” on the Internet even as similar magazines thrive when sold via conventional paper-based media.

Of particular interest are organizations such as Dow Jones, the Association for Computing Machinery (ACM) or Consumer Reports, which have successful offerings in both types of media, but which employ strikingly different aggregation and pricing strategies depending on the medium used to deliver their content. For instance, for a single fee Dow Jones makes available online the content of The Wall Street Journal, Barron's Magazine, thousands of briefing books, stock quotes and other information goods, while the same content is sold separately (if at all) when delivered using conventional media. The ACM and Consumer Reports Online follow similar strategies.