NY Times raising prices again to offset ad slump

[brooklynite]

Source: Crain's New York Business

The New York Times is raising its prices for the second time in less than a year to help the newspaper offset a steep drop in advertising revenue.

The newsstand price for the Times' weekday and Saturday editions will go up to $2 effective June 1, up from $1.50. The 33 percent increase comes just 11 months after the third largest U.S. daily newspaper last raised its prices.

The price for the national edition of the Sunday newspaper will rise to $6, an increase of a dollar. In New York, the Times' Sunday newspaper will cost $5, also a $1 more.

The company that owns the Times lost $74 million during the first quarter as its advertising revenue plummeted by 27% from the same time last year.


Read more: http://www.crainsnewyork.com/article/20090505/FREE/905059972

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The Times and other newspaper publishers are going to need to develop a business model that decouples the production side (reporting / editing / layout) from the distribution side (printing / delivery). And readers (including the folks here who decry "corporatist" media and insist that information should be "free") are going to have to become ready to pay a responsible amount for online subscriptions to the publications of their choice.

[CoffeeCat]

1. Basic supply and demand laws...

...dictate that price increases will lead to a decrease in demand.

Why does the NY Time think that raising prices will work?

Especially during an economic downturn?

[AndyA]

2. I'll bet it's the same theory that the credit card companies are using.

Bad economy + job loss + less money to pay bills = Raise interest rates and fees to make it even harder for same consumers

Sounds like FAIL to me.

There is a serious disconnect between business and their customers today.

[brooklynite]

3. Are you suggesting they take a loss until the economy turns around?

If revenue goes down, you have to either raise prices or cut costs or live off your savings. Maybe they don;'t have any to live off of.

[PassingFair]

4. They are going to have to make it free, with a small delivery charge.

THEN the ADVERTISERS will come back.

Advertisers are throwing their money
away at a non-existent readership.

Make the paper more available, and they
will come back.

[brooklynite]

6. I get two "free" papers every morning at the Subway

Both run to about 30 pages. Almost none of the content is directly produced, and no story is longer than about 12 paragraphs. Do you think the Washington Post would have ever reported on Watergate in that format?

[PassingFair]

9. They will die a slow death if they don't.

We have a local free "paper" here, and
it is the only paper with positive advertising
sales rates.

We don't even have a DAILY here anymore,
they only deliver the Detroit News/Free Press
3 or 4 times a week.

And it is as thin as a pancake.

[AndyA]

10. Increased interest rates and fees will likely increase customer defaults on loans.

Credit card interest rates are going from 6-7% to 24-25% or higher in some cases. That makes it much more difficult to pay off balances. This will drive more customers to default on balances instead of paying them off.

Plus, people who don't normally mind carrying a small balance will stop using their cards because of this. The credit card companies will suffer because of a reduction in merchant fees when their cards are used.

It's a foolish, greedy maneuver that will ultimately harm the card companies more than help.

I realize your post was directed toward newspapers, which I think will have the same outcome. In bad economic times, people cut things they don't need to survive. There are many other sources of news today, and the increase in prices just may cause them to lose more subscribers than the income they will gain from the price increase.

A friend is the editor for a regional business paper, and he says most of their revenue comes from advertising, and that they expanded their coverage and broadened their appeal to bring in new advertisers. It seems to have worked in this particular case.

[ejpoeta]

5. they do realize that raising the price will decrease readership thus lowering their ads

thus forcing them to raise prices again..... uggh.

[Romulox]

7. I wouldn't walk across the street for a FREE NYT.

Crappy, center/right paper. I happily gave it up when Times Select went live, was surprised at how easily I learned to live without it.

Looking forward to the Times imminent collapse! :)

[Jane Austin]

8. I think all papers would make a lot more money if

they'd SLASH their advertising rates.

I'd love to advertise every week, but it's not cost-effective at the current high rates.

I can't imagine what the NYT's rates must be.