The NY Times Co. (NYSE: NYT) has decided to double down on a failing strategy: Charge more for print. As circulation declines, the ailing newspaper company has decided to extract as much revenue as possible from its tangible product, despite the fact that the market is shrinking.
Starting Monday, the company's flagship newspaper will cost $2 an increase of a third from the previous newsstand price of $1.50.
Daily circulation is down 7.1% for the six months ending in March 2009 (relative to the same period a year earlier), according to the Audit Bureau of Circulations. The rate of decline has almost doubled year-over-year. Increased newspaper pricing looks like an alternative to falling ad revenue, but it is more akin to strip-mining: It'll only work for a limited period of time.
Of course, I may be a bit too severe.
The Washington Post (NYSE: WPO) and Tampa Tribune saw revenue increases from higher newspaper prices, and A.H. Belo Corp. (NYSE: AHC) is considering a 25-cent hike for the Dallas Morning News (to $1) in February. As to fears that price increases may drive readers to free news sources on the web ... aren't they there already?
Nuclear power is on the comeback trail
Apple backs AT&T in continuing spat with Verizon
Closing Bell: The recession is still over, still... do you feel it?
Reader Comments (Page 1 of 1)
5-28-2009 @ 10:33AM
larry said...
THE NEW YORK TIMES IS TOO STUPID TO EXIST AS A NEWS PAPER----IT SHOULD BECOME A CELEB GOSSIP SHEET--IT PRINTS NOTHING BUT LIES AND MORE LIES---
5-28-2009 @ 10:41AM
David said...
I do understand how the internet is affecting a lot of the print media but with the NY Times and other newspapers it is not easy selling you product in the U.S. market when you continue to display your arrogance and print anti-U.S. articles. If you want to be a leftist organization that is fine but you may need to move to find your customers..........
5-29-2009 @ 12:11PM
Doug T said...
Raising prices for a commodity (newspaper) while circulation numbers and profits are dropping would seem to be a ludicrous idea. It reminds me of a restaurant or dining facility that has a great clientele, great food with ample portions, and making lots of money. Next thing you know, the establishment decides to cut down on quality of food, use smaller plates etc. figuring they will make even more money. Next thing that happens, the place is empty and no one can figure out what happened.
In a broader sense, could the recent economic crisis have been less severe to some degree if these types of scenarios hadn't occured?