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March 7, 2018, 10:29 a.m.
Business Models
LINK: www.bizjournals.com  ➚   |   Posted by: Joshua Benton   |   March 7, 2018

For the past decade, one of the very few (relative?) bright spots in newspaper earnings reports has been circulation revenue, which has either held steady or dropped only slightly for many. (Compared to the complete collapse of print advertising revenue, “only down a little” is an offer you’d take.) The reason for that stability isn’t that people stopped canceling their print subscriptions — it’s that newspapers decided to charge subscribers more (a lot more).

The bet: If you’re still reading a print newspaper in the 2010s, you’ve probably been doing it your entire adult life, and it’s a habit you don’t want to break. So rather than chase marginal readers, as papers did in the 1990s and early 2000s — “Let’s start a new weekly feature just for these young Gen X types!” — publishers pivoted to soaking their core readers for all their worth. Fewer subscribers but at a higher price meant roughly stable revenue.

But man oh man are newspapers testing that principle! Our hometown Boston Globe, an unusually expensive paper for a long time, is going through the roof, according to Don Seiffert in the Boston Business Journal:

The priciest regional daily newspaper in the U.S. is about to get pricier, with as much as an 80 percent increase possible for some home delivery subscribers…

A customer service representative at the Boston Globe’s subscription phone center told a Business Journal reporter Tuesday that the company is planning to increase its seven-day-a-week home delivery cost, after all discounts have expired, to $25.90 per week for subscribers in the Boston metro area.

That would add up to $1,347 a year to get a Globe on your doorstep every morning. (Or not get one, depending on delivery exigencies.) That would make the Globe the most expensive paper in the country, by some margin. The New York Times took some heat a year ago for announcing it would raise seven-day delivery in some parts of the country to $1,066 a year.

This could well end up revenue-positive for the Globe. After all, it already has a super-expensive digital subscription (which tops out at $360 a year, again higher than the Times), it’s got an unusually attractive market, and it’s still a better paper than most of its competitor metros.

Plus, pushing people from print to digital doesn’t carry as absurd a revenue burden as it used to — the margins are certainly better on a digital sub than on trucking dead trees to people’s homes. And managing a large-scale shift in that direction — and reaping the huge production savings that would come with it — is in many ways the primary strategic task of American newspapers going forward.

But as more and more older readers grow proficient with their tablets and smartphones, it might also be wise not to give your remaining subscribers too many “Wait, I’m paying what to take the paper?” moments. And an 80 percent jump in cost certainly seems like something people will notice.

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