Paid Content on a tiered structure

Reports that AT&T is plan­ning on intro­duc­ing a pre-paid card for online con­tent show some poten­tial new devel­op­ments in the online space. If we were to fol­low the model fur­ther, we could see some­thing new devel­op­ing, with com­pa­nies offer­ing a bas­ket of con­tent for a fixed price. For exam­ple, imag­ine you would like to get a sub­scrip­tion to the Wall Street Jour­nal online, access to some down­load­able music, and lat­est sports stats. What if you could sub­scribe to a sin­gle ser­vice that would allow you to pay for all of those in one shot (and maybe receive a rebate as a result)? This is not dis­sim­i­lar to the model cur­rently used by cable television.

In the United States, cable tele­vi­sion has what is called a tiered struc­ture. That means that chan­nels are grouped in pack­ages that are then sold as a whole. The most basic ser­vice includes the reg­u­lar “free” net­works (for peo­ple who have low or no recep­tion), the next pack­age above that gen­er­ally offers an extended set that includes CNN, ESPN and a bunch of other chan­nels. Then, on the third tier, you can buy more expen­sive chan­nels like HBO or Show­time, which are not sup­ported by advertising.

If you were to draw a par­al­lel to the online world, you would have Inter­net access being the basic pack­age, then a pre-paid pack­age which would offer access to a cer­tain num­ber of sites (sim­i­lar to what AOL is start­ing to do by pulling Time and Enter­tain­ment Weekly behind its own ser­vice), and then would pay extra for a few one-off sites that may war­rant it.