Does price matter?

Most newspaper executives consider a newspaper an in-elastic product – meaning that any increase in price will increase the net income of the publisher although less people will buy the paper. So price does matter, but not too much. In general, newspapers are careful not the rise the price too much or too often – in times with ‘free’ internet news and free dailies a switch by the public to these media could be permanent: “too expensive” or “too time-consuming” are the two reasons most mentioned by people who stop buying a paper.

The Sunday Times found out the hard way that price did matter – an increase of 20p did cost them 100,000 in circulation in September (already the paper’s second 20p increase in 2006). Also the London Evening Standard lost considerably after rising it’s price with only 10p – although the increased competition by free papers is probably another reason for the drop in circulation.

Also price drops effect sales. In Scotland the local version of the Sun (10p) passed the Daily Record (35p) as best read Scottish paper. Going back from a reduced price, however, might not be so easy as the Daily Express found out – after going back to normal after a period of reduced prices. The new readers did not stay with the paper.

So ‘price does matter’ and what seems to be emerging in newspapers today is that classical ‘price discrimination’ (charging different audiences different prices for the same product) is used more than ever. In effect, the distintion between free, cheap and paid seems to be fading these days.

Some paid newspapers give away substantial parts of their product in certain areas (Liverpool Daily Post, Manchester Evening News – see previous) or to certain customers (Welt Kompakt in first class train travelers – see previous). Also the amount of unpaid, pre-paid, sample or bulk distribution seems to grow in some European countries (the Netherlands, Germany) while the New York Times sells at a discount price of 25c in the afternoon. The E-polis papers in Italy have a cover price but most of the papers are distributed for free. Some financial papers in Spain and Denmark and even the New York Sun are rumoured to give the majority of their copies away, although they still have a cover price. Selling papers at reduced subscription prices to groups like students is also practised (Germany, USA, UK, the Netherlands) while un-bundling the full week subscription is another way of reducing the price for customers.

Reducing the price or giving the paper away is not the only option. Some papers publish ‘lite’ free or cheap products that are hoped to attract younger readers. The Dutch evening paper NRC Handelsblad launched the less expensive morning taboid in 2006 and already sells almost 50,000 copies, Le Matin (Switzerland) launched the free Le Matin Blue, The Washington Post has the free Express, The Evening Standard the free London Lite (formerly Standard Lite) while Die Welt (Germany) launched the youth-oriented tabloid Welt Kompakt. Scotland’s Daily Record launched a 15p PM edition in September 2006 but moved to the free model today (January 22).

Some free dailies seem to move into the other direction: charging readers for distribution. In Switzerland, Denmark (see previous) and Malaysia subscription to free dailies is possible while Metro Holland is thinking about a ‘free’ financial paper were readers only pay for distribution (see previous).

These and other pricing-issues will be discussed on the Copenhagen INMA seminar Does Price Matter? on 1 and 2 February. Speakers and presenters include profossor Robert Picard (J├Ânkoping Business School), Jan Wifstrand (formerly Dagens Nyheter) Earl Wilkinson (Excecutive Director International Newspaper Marketing Association), Mark Rix (Manchester Evening News), Michael Phelps (CEO Washington-Baltimore Examiner), Nina Haas (Stryria Medien), Morten Nielsen (Media & Marked), Poul Madsen & Torsten Bjerre Rasmussen (24timer), Monica Lindsted (co-founder of Metro), Antonio Cipriani (E-Polis), Philipp Fleischmann (Die Sportzeitung), Ian Clark (thelondonpaper) and myself.

Sources: Greenslade (MediaGuardian), Innovations in newspapers, Follow The Media, de Nieuwe Reporter

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