Subject: Re: USA Today Online From: mkolowich@attmail.com (Michael Kolowich) Date: Sun, 26 Mar 1995 14:01:59 +0000

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Dale Gardner queries:
>> What sort of pricing models are the nice people at Ichange et. al. looking
at?

Interchange-based services will be priced by individual publishers, but we've 
taken every possible step to ensure that most of these services can be priced 
below $10 a month.  For competitive reasons, we haven't yet been public with 
the pricing (though obviously current and prospective Interchange-based 
publishers are being fully briefed).  Here, though, are some of the 
principles:

1.) The branded publisher has complete control over the monthly subscription 
price, which includes: a.) that publisher's own content; b.) a specified 
number of connection hours to the network; c.) a common content set (news, 
sports, weather, quotes, interest groups) called "Interchange Central"; d.) 
mail and member services; and e.) full web access (available shortly after 
commercial launch).

2.) A certain fixed portion of the monthly subscription fee goes to 
Interchange to cover b through e above.  The publisher keeps most of the rest.

3.) Overtime is charged at a competitive rate, and its revenue is shared 
between publisher and Interchange.  We're not sure how much overtime will be a
factor, given a use model that shortens the ratio of connect time to actual 
usage time (see below).

4.) The member of one service can add other publishers' services.  The add-on 
publisher keeps the majority of the add-on revenue, but cuts of it go to 
Interchange and to the publisher who originally acquired the customer.

What's more, an hour on Interchange does not equate to an hour on most other 
services.  Because Interchange is designed around an intermittently connected 
use model, it's possible to burst-connect to Interchange, grab what you're 
interested in, and interact with it offline (if your priority is efficiency). 
 The offline model extends to published material, mail, discussions, and 
searches.

Bottom line: Both publishers and members will see an entirely new value 
proposition that I believe will be very attractive.  In the specific example 
cited here, I believe that both USA Today and its subscribers would be further
ahead by publishing on Interchange: the price would be lower and Gannett would
still make the money it plans on making.  The difference comes from both a 
more efficient network, from the benefits of the online/offline model, from 
the stake that USA Today would have on add-on usage, and from AT&T's 
willingness to extract a lower contribution per member.

Michael Kolowich
President, Interchange Online Network
michaelkolowich @ ichange.com
mkolowich @ attmail.com
mkolowich @ zdi.ziff.com

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