Name Your Own Price (NYOP) is a system where buyers are able to communicate the price they are willing to pay for a specific service or good, and the transaction only occurs if the seller accepts this price (Fay, 2004). This type of pricing has become popular because of the website Priceline.com, where the buyer is able to name his own price for hotels, car rental services and flights. The disadvantage for the buyer is that he does not know who the supplier will be, or in case of a flight, he is unaware of the schedule until after he makes a non-refundable purchase. This manner of pricing makes it possible to distinguish price-sensitive from less price-sensitive travelers.

Even though this was Priceline’s trademark pricing strategy, on September 1, Priceline,com eliminated the pricing strategy Name Your Own Price for flights. Priceline will still perform the flights that were booked before this elimination and they continue to use NYOP for hotels and car rentals. For the flights, it is able to look at specific deals instead of NYOP, which are called Express Deals.

Why did they stop offering this service? Your mobile phone can be blamed. According to the spokesperson of Priceline, Lemarchand-Wood, there has been a ‘dramatic evolution in both technology and consumer behaviour when it comes to booking travel’ (Schaal, 2016). More people are booking flights and hotels via their mobile phone, and the NYOP was difficult to book on such a small screen. Therefore, they now focus on Express Deals, which are easier to book, also on the mobile application. The removal of NYOP is part of their new strategy which will ‘help consumers connect with deals faster and more easily than before’, according to Lemarchand-Wood (Shaal, 2016).

This transition to mobile booking might become the end of NYOP, however, it can just as well be an opportunity to make the booking process easier for mobile applications.

References:

Fay, S. (2004). Partial-Repeat-Bidding in the Name-Your-Own-Price Channel. Marketing Science, 23(3), pp. 407-418. <https://warrington.ufl.edu/centers/retailcenter/docs/papers/Fay2004.pdf>

Schaal, D. (2016, September 02). Priceline Kills Name Your Own Price for Flights. Retrieved 24 September 2016, from <https://skift.com/2016/09/02/priceline-kills-name-your-own-price-for-flights/>

The technology subject we will discuss is information goods. We will focus on the newspaper industry and the platforms Blendle and Flipboard, which disrupted this industry.

Due to digitalization, the newspaper industry has changed. For example, the threat of new entrants has increased, since the fixed costs are lower and the internet gives direct access to consumers. Furthermore, the bargaining power of suppliers and buyers has increased. Besides that, it is more difficult to compete within this market and substitutes are rising.

The first new technology we would like to introduce regarding this industry is Blendle, this is a platform where you can read articles from different newspapers, which currently provides over 100 publishers, and therefore you have access to more and broader sources of news. Blendle creates a personalized pages with news, based on your preferences. If you want to read an article, you pay on average 19 to 39 cents, this is the so called a micropayments model. In the Netherlands and Germany, so far 650,000 people paid for the service, and is now extended to the US. Blendle receives 30% of the readers’ payment, the other 70% goes to the publishers.

The second technology we introduce is Flipboard. This is also a platform for following news articles and magazines. Similar to Blendle, you are able to choose the topics you are interested in and it shows specific cover stories. When you find an article you are interested in, you click on it and you are redirected to the website of the publisher. Flipboard makes revenue from showing advertisements on their platform.

The advantages of both platforms is that they do not require a subscription, they use a recommendation system which personalizes the newspage and it is possible to follow other users and publishers. For the publishers the platforms bring reach and awareness to readers.

The advantages of Blendle over Flipboard are that there are no advertisements and the possibility to receive a refund when the article was not of good quality in the eyes of the reader. Furthermore, adblockers are common nowadays and therefore it is  more difficult for publishers to earn revenue with their newssites and this platform makes it possible to earn revenue in a different way. However, the payment and the effort to pay are the main weaknesses of Blendle.

The strengths of Flipboard over Blendle are that there is no payment obliged for the articles and that they only use advertisements that are related to the articles, which increases revenue. The main weaknesses of Flipboard are that you are redirected to the publisher’s website, for which the costs of reading the article might not be clear upfront and that there are advertisements in between the articles.

Link to the related video: https://www.youtube.com/watch?v=3KLYqMeOVZg&feature=youtu.be