I’ve heard BoSacks talk about his belief that print magazines will become a luxury item people will pay top dollar to have, and I tend to agree. I make a lot of impulse newsstand purchases and I have already seen it making a bigger impact on my wallet thanks to increasing cover prices.
As a consumer this really makes me rethink my purchase: do I have 100 or so back issues of other magazines at home with similar or better content? If not, how much of its content does this magazine’s publisher offer for free online? If the publisher doesn’t offer free content, does another publisher offer similar content free online? If the answer is no, I’m still not completely sold on the purchase until I decide if another print magazine currently on the newsstand has similar content at a cheaper cover price or better content at any price. If the answer is still no, I look to see how much money I have in the bank. Purchasing content, my favorite vice, is now a lengthier process.
But for the business of this thesis, we don’t care about my personal shopping habits or magazine addictions. No, really all I need to summarize here is how much are prices increasing & the reasoning behind it.
So this initially I’m gathering from one article, and and building off a previous article I read here, and posted about here.
NYT article from April 13, 2009 “In Switch, Magazines Think About Raising Prices” Stephanie Clifford reports:
- Hearst Magazines raised cover prices on more than half of its magazines last year and plans to raise subscription prices this year.
Advertising had always made up the difference for low subscription rates.
- The Economist has been a successful leader in raising subscription prices. Cover price is $6.99 and a subscription is $100 on average. Despite price point, subscriptions are up 60 percent since 2004 and newsstand sales rose 50 percent.
“We get more money out of our readers than advertisers, and that’s a very different model,” said Alan Press, senior vice president for marketing in the Americas at the Economist Group. “We’ll never discount the kind of content we have.”
- One of the most popular and expensive mass magazines, People, has also successfully been raising prices. Subscription price has gone up 5 percent, to $104 a year, in the last four years. Cover price is up 21 percent to $4.09 issue (and special issues cost more). Still subscription and newsstand sales are both up, slightly.
At People the strategy is to maintain premium pricing on both sides of the equation, says Paul Caine, president and group publisher of TIme Inc.’s style and entertainment group.
The article also notes that, "public-place readers who pay nothing are almost as engaged as those who pay."
So, is this the exception, not the rule? I’m not sure about that.
Hoffman Media is one that charges a hefty newsstand price for it’s magazines: $7.99. I balked at the idea of spending eight dollars on a magazine, not a special issue, until I took a hard look at the content. After doing so, I had to agree these magazines were great products, not just in the quality of the look and feel, but the content itself offered recipes and ideas that seemed fresh and new — not replicated in the bazillion other women’s magazines with holiday themes. I did actually swallow hard and buy three magazines that day — but don’t tell my partner, he thinks I bought paper products and other sundries for the house.
Back on point, rising subscription costs and newsstand prices could be leading more people to look for content online. So I’m curious as to what is driving these companies to see an increase in sales despite raising their prices. Maybe content really is King.