Third price hike in 2 years for NYT

THE cost of buying the New York Times six days a week has doubled in less than two years following the publisher’s decision to ratchet up the cover price for a third time in two years.

From June 1, the New York Times will cost US1.50 – a 33 percent increase in price, according to reports from Associated Press.

The price has risen 25c for the two previous increases.

The New York Times is the third largest-selling newspaper in America after USA Today and the Wall St Journal. It has a circulation of just over 1.1 million.

The Sunday edition will cost US$5 in the New York area – a rise of US$1.

Outside of its home state, Americans will have to pay US$6 – again, a rise of US$1.

The home delivery fees remain unchanged.

The economic slump and structural changes have forced the New York Times to make these price hikes.

For years, newspapers have been too cheap. It is ridiculous a newspaper costs less than half the price of a cup of coffee.

The value of a good newspaper is far, far in excess of its cover price.

Perhaps one might argue that it is a great pity newspaper companies have failed to address this issue in the good times. Which, of course, is when they all should have done so.

For the New York Times to move amid the worst economic downturn in America for 60 years opens its management up to criticism for its lack of pricing strategy, and risking its circulation when it is most under threat.

But then, one must consider where management has positioned the company: US$1.1  billion of debt, forced to sell and lease back much of its iconic Times Sq building, and threatening to shut a newspaper that it spent US$1.1 billion to buy in 1993. Not brilliant.

However… As any cost-focused manager would tell you: if you drop your circulation but make more money from a higher cover price, then you win two ways: you print fewer papers (cheaper newsprint costs) to print and put more money in the till.

Try telling that to the advertisers, though. The equation may work for selling widgets, but it doesn’t for media. Falling circulation simply lights up for the exit sign for advertisers.

We need to pay close attention to what happens in America as the papers put up their cover prices and risk their circulation, which collectively fell 7 percent across the nation from October 08 to March 31, 09.
Mark Hollands

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