Differential Pricing - Multex.Com

1. Differential Pricing- Multex.Com Presented by Group 3 Ashish Khamar David Kleinman Ken Song Dallas Thornton Marck Vaisman

2. Overview of Multex.com • Electronic data service provider • Providing financial information • “Multex Investor” service • A part of Multex’s services for individual investors • Information services related to stocks, funds, and personal finance • Investment research reports available through Multex Investor • Investment banks • Brokerage firms • Third-party research providers (e.g., Multex.com)

3. Overview of Multex.com (Con’t.) • Current pricing structure • Some free reports • Others are priced by Multex.com • Pricing structure should be: • Based on the consumer’s demand • Consumer’s appreciation for the information • Not based on the marginal cost • Two options to consider: • Bundling • Versioning

4. Bundling • Bundling: • Offering a package of services at one fixed price • Current Mutex’s pricing: • No bundled services • Pay-per-view approach to pricing

5. Bundling (Con’t.) • New pricing Strategy: • Bundling various information at one rate • Demands for individual financial information goods is variable based on… • Current market and industry trends • Customers’ different valuation based on the trends • Negotiate pricing with its information suppliers • Set the price at a profitable level • Analyzing previous customer utilization of the information

6. Bundling (Con’t.) • Bundling Example for Multex Investor • Values of customer “A” • Telecomm industry research report: $20 • Company information of AT&T and MCI: $10 for each • Values of customer “B” • Telecomm industry research report: $10 • Company information of AT&T and MCI: $20 for each • Revenue: • Sell them separately, • Maximum pricing for each report: $10 • Total revenue: $60 • Bundling the data into one package • Pricing it at $40 for a package • Total revenue: $80

7. Bundling (Con’t.) • Bundling Pricing Options: • Bundle financial data of different categories (e.g. industry and company) into one price. • Bundle access to the entire data set and price based on usage (e.g. articles per month) • Maintain the individual-article based pricing availability • In order to maintain the customer base of investors • While pushing frequent users to a bundled plan • Eventually, this individual-information-based pricing can be phased out

8. Versioning • Versioning: • Various customers’ appreciations for the same information • Capitalize on each customer’s individual demand • Time-based versioning • Degradation of perceived value of information over time • Information could be priced on a degrading time scale

9. Versioning (Con’t.) • Versioning Example for Multex Investor • Price a report at $50 for the first week, $40 the next week, $30, $20, and so on until it reaches a terminal level • Let the individual customer can decide when to purchase the information • Customer “A” values the information at $50 • He will likely buy in the first week • Customer “B” values it at $40 • He will likely wait until the price reaches that point

10. Questions??