Can the New York Times charge $5 for a single copy?
August 20, 2008 by grzegorz.piechota
Juan Antonio Giner of the Innovation consulting company claims: ”Quality information and caviar journalism is not free. A short latte cannot cost more than the Times!”
Mr. Giner, a newspaper fan and a world-class expert on journalism, writes on his blog:
”When you read stories like this one [on roots of war in Georgia] in yesterday’s edition, you realize that The New York Times is what INNOVATION calls a necessary newspaper and, like Starbucks or Target, an ‘affordable luxury…’
A dollar fifty [for a single copy of the Times]?
Let’s get serious.
You cannot keep this level of reporting at this price.”
So he suggests to charge five dollars for the single copy and increase subscription rates.
As an editor I am the first to praise anybody who says the editorial work is worth more.
Mr. Giner’s point is clear:
- Valuable products should value themselves and in that sense the cover price can be used to manage the brand image.
- A quality newspaper with such a demographics like the New York Times is probably less price elastic than other US papers, so a huge part of its audience could accept the higher price.
However, in my view the brand image is just one of the business factors to consider.
- If they loose any part of their audience after a hike, would they be able to keep the ad rates? This risk is very serious for the company whose circulation/advertising revenues ratio is like 37/63 (in 2Q 2008).
- Is it a right moment for such a move when Rupert Murdoch’s Wall Street Journal goes into more direct competition with the Times? The Journal’s cover price is $1.50 now too. Would you expect Mr. Murdoch to adjust the Journal’s price accordingly or to keep it in hope of grabbing some readers from the Times?
Mr. Murdoch can surely afford it and he is very experienced in the UK price wars in both tabloid and quality markets. He has also suffered recently when he had increased the price of the (UK) Sunday Times.
Have a look at this interview with the Sunday Times editor John Witherow:
”Since a price hike to £2 almost two years ago, [the Sunday Times] has lost 100,000 readers…. [John] Witherow fought the price increase, only acceding in order to avoid editorial cuts. “My view is that we did it too quickly and I think we all acknowledge that now… [Paul] Dacre [editor in chief of the Mail titles] said it was a strategic miscalculation of monumental proportions in his typical even-handed way,” he says, laughing. “But it was. We did it too fast and we suffered.”
As a Polish newspaper-man I am also aware about cheap cover prices.
In 2006 a launch of a new daily in the quality market unleashed here a price war that forced my own Gazeta Wyborcza to cut the single copy charge from 2.80 Polish zlotys in Warsaw to 1.50 ($1.23 to $0.65). It has proved to be the right strategy, as we have defended our readership base and the new entrant has not succeeded until now. However, the war is not over and it is always easier to decrease the price than to increase it.
Join the debate
Do you think that quality newspapers should position themselves as ”affordable luxuries” as Mr. Giner suggests? How to justify such a move in the times when most of these newspapers do not charge for the same content online?
Tagged: Case studies, Marketing, newspaper, price, strategy
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[...] has weighed into several online discussions of western journalism trends and ideas, such as an anaylsis about the value of news brands – and, liteally, how much to charge for it. This was a response to [...]