Daily Journal

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Additional information can be shared:

• A user survey has been conducted to view the website's performance and to get a sense of the people visiting the website.
• The website has a large number of hits and it's the number 3 in the UK already in terms of unique visitors.
• People visiting the website are from the upper middle-class segment with incomes of $75,000 and higher.
• Visitors are also quite educated with 50% that have a university education and 25% that have at least a Bachelor degree.

Candidate should start by explaining his approach of tackling this case.

The main aim is to come up with revenue models that can be used by the newspaper. Given that we're dealing with a website, candidate should ask for statistics on the website, but the information can be shared either way.

Possible answers:

A subscription model

Visitors can pay a monthly fee to get access to parts of the content or the entire content. The company can also restrict access by date or by quality of the article.

A transaction model

Instead of committing people to a subscription, some content can be restricted in access and users will have to pay a small readers fee to read the article. They can also buy readers-credits to read restricted articles.

Advertising

The company can have advertisements placed on the website and earn revenue from it.

Other options are all good as long as they make sense and are compatible with online newspapers.

Eventually, interviewer should guide the candidate towards the transaction model.

Possible answer

The general news that can be found on other websites is for free, but a limited amount of articles, research-articles, columns and so on cost a small fee to be read. These articles are more enticing towards the users and the small fee gives it a low barrier to purchase & read.

The information in Table 1 is used to throw the candidate off and to test if they select important information out of different forms of communication.

Candidate should come up with additional assumptions on the fee & conversion rate.

Possible answer

Let's assume a conversion rate of 5% and a fee of $0.25 per article that is read.

(5%*1 m)*($0.25)*1,000=$12.5 m.

Possible answer:

It seems that a transaction model is beneficial where visitors pay a small fee for premium articles. Our possible revenue is an estimated $12.5 m per year, but we still need to expand our analysis to validate that estimate.