Subscription pricing and cost - the US model

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Comment by Pierre Bisaillon on October 28, 2009 at 5:09am

Always an interesting discussion Stanko.

During my time living in Germany, I often asked my wife and our friends why would I ever bother to subscribe to a magazine if the price for a monthly was simply 12x the newsstand price. Their answer was the convenience of delivery since you are purchasing the same product regardless of how you obtain it.

In my day-to-day position working with publishers, I would often ask the same question. Their answer usually revolved around the fact that it's always been that way and losing the relatively-high, percentage-wise, subscription revenue, even if it's a small percentage of circ., would be difficult to recoup from advertisers. Your figures above certainly support this but only at first glance.

Let's say a publisher in Europe has a 50,000 circ title (45k newsstand and 5k sub) with a cover/sub price of approx. $4.17. The big question is what would be the circ and ratio if the sub price were dropped to $1.42.
I would imagine subs would increase dramatically as the economic barrier drops considerably but I would also imagine the newsstand dropping, to a lesser degree, as some newsstand buyers become subscribers. Logic would dictate that overall numbers would increase though as the overall barrier to entry drops. (newsstand barrier is same, sub barrier drops=overall drop)

The $64k question is would the advertisers now view the increased circ as being just as valuable as before. If not, then the CPM rates you quote may drop which begins to even out the equation. What would be most interesting, and vital to derive an answer, would be to speak with international advertisers and see how they value the two models. Short of a major European publisher completely changing its model, but perhaps never being able to revert, and comparing the results, we will most likely never know. My experience in Germany, where tradition is highly valued, would indicate this is quite unlikely.

Your thoughts

Pierre Bisaillon
Mygazines

Comment by Aaliyah Ibra on October 27, 2009 at 10:59pm

I think you are making sense with your complain

Comment by Dick Benson on June 13, 2008 at 12:43pm

You make some very interesting comments concerning subscription costs for US magazines. My experience shows US publishers tend to charge lower prices then other International publishers. Probably because there are so many publications in the US- price is driven down. I would like to learn more.