The Gotham City News is moving to a paywall subscription service rather than a free news website with unlimited access. If subscribers would like to access more than ten articles per month, they will need to pay a monthly subscription fee of $24. However, if they are also weekly subscribers of the print edition of the newspaper, they receive a 60% discount on the on-line subscription rate. The monthly rate for the print edition of the newspaper is $28. Based on market research, the Times believes that 22% of the households that order the print edition will also order the website subscription. While there are basically no variable costs to the website version, the print edition does cost $23 per month to print and deliver to households.
Market research indicates that the average length a current print edition subscriber will continue subscribing is only 16 months if they choose to also purchase the on-line subscription. Under these assumptions, what is the expected 3 year CLV for a print edition subscriber who chooses to also subscribe to the digital version? (Note: presume they continue for all 3 years with the on-line version).
both = $526
online = $864
print = $180
margin = $5
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