Readers Not Enamored By High Newspaper/Magazine Prices In The Digital Storefront

Philip M. Stone April 8, 2010 Follow on Twitter

Publishers have gotten the message not to repeat the Internet free news fiasco within the digital storefront that includes Kindle, iPad and others, but readers are already howling that publishers are charging the same for their digital product as they do for print, but without all of print’s ancillary costs, and they are just pocketing those savings.

The blogosphere is seeing red over such magazines as Time and Popular Science charging $4.99 per single copy for iPad versions that cost the same as their print copies at the newsstand. One savvy Time customer wrote, “They’re passing the savings on distribution and raw materials to themselves.” There are some extra costs in preparing digital versions and digital does have features that print can’t match such as video, but the bottom line is that readers are street-smart when it comes to pricing – they are prepared to pay but there are limits and charging the same as a newsstand copy is crossing that line in the sand.

Mind you, publishers supposedly, aren’t stupid either when it comes to pricing (except when they gave it away on the Internet!) If the marketplace says digital pricing is too high, it can always be tweaked down and since everyone in marketing knows it’s a lot easier to lower a price than to raise one, why not go in at the top and if necessary, work your way down.

There have been some buys of the Time app at the newsstand price. Perhaps a few weeks at single copy pricing before subscriptions are offered will drive home to the digital reader what good value a subscription can be when compared to single-copy buys. On the other hand, the iPad is a new novelty – when will the “been there, seen that, don’t need to buy things to read when there are still free news apps around” kick in?

The Wall Street Journal is already charging $3.99 a week. USA Today, on the other hand, got a hotel to sponsor its free iPad app through July 4 and then the subscription offer kicks in. The New York Times is in there with a free app offering limited  content – eight to 10 articles a day as a digital package – text, pictures, video –  but that’s thanks to a deal with Chase Sapphire that says it paid “well under” $500,000  for 60 days of exclusive sponsorship (for some reason in a couple of exchanges with ftm they were not more specific on the amount). The Times says it will offer a more complete subscription package later. And perhaps as digital pricing sign to come, The Times has announced it is upping its Kindle monthly subscription price from $13.99 to $19.99.

All of this takes on added importance when the industry keeps asking itself for how much longer will print remain a viable platform? It’s not that newspapers or magazines will disappear especially given all the digital possibilities out there, but it is more how long until the print platform disappears. James Tyree, the new owner of the Chicago Sun Times told Bloomberg he believes, “Newspapers have got a good strong 10 years. By then you’ll have to evolve into something else -- maybe five years to evolve into something else – or you’ll just be out of business.”

If that’s right then there’s still some digital tweaking time left. And one question still to be resolved is what to do about all of that free news on the Internet that could impact the usage of tablets for news. Tyree pointed out succinctly the Internet problem, “If we put up a pay wall on the newspaper, everyone would go to the Tribune so we can’t do that.” And to carry on that thought, if The Tribune put up a pay wall then everyone would go to a local Chicago broadcaster web site. About the only way pay on the Internet will work for a paper whose major commodity is local news is for local news not to be available anywhere for free.

That’s one reason why everyone will be watching what happens at The Times and Sunday Times in the UK when Murdoch puts up their pay walls in June. If The Guardian and the BBC remain free, can the Murdoch pay walls work because his newspapers carry enough material not found elsewhere? It’s known he and his people have been lobbying furiously trying to get everyone who counts to erect pay walls for that very reason, but right now there are few takers but lots of watchers who want to see how he does.

And with Kindle, the iPad and other tablets will people pay for information because of the ease of the portable platform? Apple had a great first day of some 300,000 sales – although that was a lot less than some had predicted – but only the passage of time is going to tell us if this is just a fad or a novelty which will catch on for the true masses as did the mobile phone when prices really came down.

But at least publishers seem to understand again that free is not good. When initial advertising iPad deals expire those who are offering free apps will likely switch to paid apps and those already charging will tweak to get the best bottom line. You can’t help but feel there is something in the air that says if the Kindle and iPad platforms catch on in a mass market way, then newspapers and magazines may yet again find themselves able to start paying again for office Christmas parties.

See also in ftm Knowledge

We've Gone Mobile - and nothing's the same

Consumers have taken to smartphones in huge numbers. Competition among device makers, telecoms and content producers has created an insatiable demand. With so much volume markets are fragmenting... and nothing's the same. 132 pages PDF (February 2011)

Order here

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 123 pages PDF (May 2010)

Order here

Media in Spain - Diverse and Challenged – new

Media in Spain is steeped in tradition. yet challenged by diversity. Publishers hold great influence, broadcasters competing. New media has been slow to rise and business models for all are under stress. Rich in language and culture, Spain's media is reaching into the future and finding more than expected. 123 pages, PDF. January 2018

Order here

The Campaign Is On - Elections and Media

Elections campaigns are big media events. Candidates and issues are presented, analyzed and criticized in broadcast and print. Media is now more of a participant in elections than ever. This ftm Knowledge file reports on news coverage, advertising, endorsements and their effect on democracy at work. 84 pages. PDF (September 2017)

Order here

Fake News, Hate Speech and Propaganda

The institutional threat of fake news, hate speech and propaganda is testing the mettle of those who toil in news media. Those three related evils are not new, by any means, but taken together have put the truth and those reporting it on the back foot. Words matter. This ftm Knowledge file explores that light. 48 pages, PDF (March 2017)

Order here

More ftm Knowledge files here

Become an ftm Individual or Corporate Member to order Knowledge Files at no charge. JOIN HERE!