Circulation revenue rises despite newspaper price hikes

Monday Note | The Evening Sun | Journalism.co.uk
Print readers are “super loyal and super solvent,” argues Frédéric Filloux, so why not ask them to cough up more? Among other benefits:

There is no elasticity in newspaper prices. In other words, a significant price hike won’t necessarily translate into a material drop in circulation. But the extra money raised in the process will provide welcomed help for investments in digital technologies.

Filloux bounces off a study by the consulting firm Simon-Kucher, which compares newspapers’ elasticity favorably to “such products as innovative pharmaceuticals and CD’s from cult rock bands.” The study (table below) shows that when The New York Times raised its weekday newsstand price in 2008 and 2009, its circulation revenue rose. When The Washington Post raised its Sunday paper newsstand price from $1.50 to $2, circulation revenue increased 10 percent.

Newsstand price increases for these papers (and subscription increases in some cases) do not appear to lower circulation revenue. Circulation continued to rise despite price increases.

Poynter business analyst Rick Edmonds says price increases may work for big papers but are “a lot riskier for skinny papers with little enterprise journalism.” He says he’d put “the vast majority” of papers trying a paywall and a print subscription increase “in the risky column.”

At the Hanover, Pa., Evening Sun, Editor Marc Charisse writes that his newspaper’s price is still low. “The pocket change you pay to have your newspaper delivered doesn’t really begin to pay the bills around here, so newspapers are scrambling to find ways to save money as well as to find new sources of online revenue.”

In the past, before the days of online news, I never heard a reader insist they were entitled to a free copy of the paper. Online expectations seem to be different, at least in this transitory period of journalism history. But I hope I can get readers to see that the $3 and change a week that we charge for seven-day-a-week home delivery and full online access to our site and e-edition (a digital copy with the same look of the daily paper) is still a great deal.

Wall Street Journal Digital Network Managing Editor Raju Narisetti spoke at the World Editor’s Forum in Vienna, Austria, Monday and warned smaller papers not to read too much into The New York Times’ paywall successes. He tells Rachel McAthy, “my concern is why are we not focusing on the advertising end of the business which is … much larger and is growing, rather than focusing on the subscriber end of the business where we’re going to have a much harder time convincing people to pay for content?”

As an industry we know our readers very well, we know what they do what, what they read, where they come from. Why is it that we haven’t invested enough to know how they interact with advertising and taken advantage of that?

We have made it easy to comment on posts, however we require civility and encourage full names to that end (first initial, last name is OK). Please read our guidelines here before commenting.