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Newsonomics: GateHouse’s new round of layoffs fits the sad logic of the coming consolidation
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Aug. 28, 2013, 12:57 p.m.
LINK: www.theguardian.com  ➚   |   Posted by: Joshua Benton   |   August 28, 2013

In The Guardian, Roy Greenslade notes that Newsquest newspapers (that’s the British arm of Gannett) has hiked newsstand prices and seen a drop in circulation:

One of the key reasons for that drop was Newsquest’s cover price rise strategy. In September last year, it increased the price from 45p to 65p on weekdays and from 60p to 85p on a Saturday.

At the time, the Argus was selling almost 21,000 a day. Over the first half of this year, the average sale fell to 16,622. And it is still falling. In June, the total was 15,787. And I understand that in July it slipped below the 15,000 mark…

Of course, despite the decreasing sales, Newsquest will have generated more profits. And so pleased is the company with its price rise initiative that, despite the catastrophic effect on sales, it has now imposed increases on four more dailies — the Worcester News, Oxford Mail, Swindon Advertiser and South Wales Argus. They went up in early July from 45p to 65p. Expect bad news with the next ABC release next year.

This is a version of the same set of moves that have been popular among U.S. dailies: hike up single-copy prices, hike up home delivery prices even more, and hope that the math ends up with you making more money on net from fewer subscribers. It’s a bet that the remaining readers of print newspapers (a) are quite devoted to the format at this point and (b) can afford to pay higher prices. The Boston Globe, The Dallas Morning News, and others have played that game.

That said, purposefully paring down your customer base (and aligning it even more completely with an older audience) has obvious downsides as a long-term strategy, even as it juices the circulation revenue bottom line for now. Greenslade takes a dim view of it:

Newsquest editors and journalists be warned. The company isn’t trying to sell newspapers. It is trying to make as much money as possible before it kills off the golden goose.

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