Why are online newspapers so freaking expensive?

[soupcxan]

I like reading the New York Times and the Wall Street Journal. I would gladly purchase a subscription to both. But the NYT digital-only costs $195/year ($250/year if you want to read the same content on your ipad too!) and the WSJ digital-only costs $260/year. That seems way too high to me!

I am 30 so I have never had a newspaper delivery service. I don't know what the local newspaper used to cost to have delivered, but I bet it was less than or equal to this...and they had to pay people to print thousands of copies of the thing, then drive around town throwing them at everyone's house. With digital, all thoses costs disappear. Yes, I know that online ads are worth less than print ads but that is still not going to entice me to spend $500/year on a couple of newspapers.

For comparison, my netflix subscription is $8/month. I would happily pay for each of those newspaper's content at roughly the same price. Instead they are charging 50-100% more than that. So, I don't subscribe, they get no revenue from me, and I read the few articles they make available for free or through google. I would like to support these quality institutions to keep them from ending up like the rest of the newspaper industry but they are making it very hard.

 

[Amethyst]

Husband won't even consider an online subscription; must have his messy newsprint. He gets NYT weekend delivery - just Saturday and Sunday - $46 every 4 weeks. WashPo daily delivery is costing us $57 every 6 weeks. Both keep raising the price.

I assume the business model is: People will pay for news that is gathered, reported, edited, and distributed in some reliable fashion (in contrast with blogs, which vary wildly in quality and contain far more opinion and rumor than fact). Reporters, editors, web designers, etc. have to be paid. Since some (usually older) people will pay big bucks for news delivery, why charge much less for online subscriptions?

It will be interesting to see if, and how, this business model changes in response to "the heck with it, who needs news at that price" behavior by younger consumers.

Amethyst

 

[W2R]

I will not pay for either online or print versions of newspapers. Given what I perceive as the death of independent investigative journalism during our lifetimes, newspapers are not worth those prices to me. It is sad, really. We do not even HAVE a daily (paper) newpaper in New Orleans any more, at any price.

Times change so quickly. Ah, brave new world.

 

[Bestwifeever]

For the same reason best-selling ebooks for a Kindle, Nook, etc., cost more than they should given there's no physical production beyond coding the author's ms. in the ebook format (if the author hasn't already done so)--no paper, no typesetting, etc.

I know someone who subscribed to the WSJ print version, which allowed access to the full digital edition. He kept the subscription on vacation hold as much as he could (which got credited against his subscription costs) but could still access the digital edition, for a very small fee, I think--maybe $10 a month?--during the vacay hold. Not sure if this is still possible.

 

[Lsbcal]

Good online free news sources:
1) BBC news - free, has US section and broader European scope
2) NY Times news - can use about 20 times per month, free
3) Business Week
4) Washington Post - this is a new one for me

I'm sure there are a lot more of these.

I'd pay for the NY Times if they had maybe a $5/month fee. Agree that the current rates are just too high, especially for a West Coast guy.

 

[Mulligan]

I like reading the New York Times and the Wall Street Journal. I would gladly purchase a subscription to both. But the NYT digital-only costs $195/year ($250/year if you want to read the same content on your ipad too!) and the WSJ digital-only costs $260/year. That seems way too high to me!

I am 30 so I have never had a newspaper delivery service. I don't know what the local newspaper used to cost to have delivered, but I bet it was less than or equal to this...and they had to pay people to print thousands of copies of the thing, then drive around town throwing them at everyone's house. With digital, all thoses costs disappear. Yes, I know that online ads are worth less than print ads but that is still not going to entice me to spend $500/year on a couple of newspapers.

For comparison, my netflix subscription is $8/month. I would happily pay for each of those newspaper's content at roughly the same price. Instead they are charging 50-100% more than that. So, I don't subscribe, they get no revenue from me, and I read the few articles they make available for free or through google. I would like to support these quality institutions to keep them from ending up like the rest of the newspaper industry but they are making it very hard.

Thanks a lot Soup! I had a theory that anyone under 40 never reads the newspaper and wont buy one, and you are confirming it! Your generation is destroying my right to a daily newspaper delivered to my driveway. . My monthly subscription to the STL Post Dispatch is a little under $15 a month, so that isn't bad. However, I wouldn't be surprised in 10 years if that option was off the table as times change. I read last week at the LV McCarron Airport 15 years ago, cigarettes and newspapers comprised over 35% of the vender sales. Now its 4%. Nowhere to smoke and no one wants to read hardcopy anymore.

 

[yakers]

I get the local paper LA Times delivered but go online when I want to send an article to friends. I get The Economist Magazine on paper and electronically and almost nerer read the paper. I would just drop it but its the same price for paper+online. I would and do pay full price to read it and anticipate doing so even if there is other free economic information available on the web.

 

[MooreBonds]

I like reading the New York Times and the Wall Street Journal. I would gladly purchase a subscription to both. But the NYT digital-only costs $195/year ($250/year if you want to read the same content on your ipad too!) and the WSJ digital-only costs $260/year. That seems way too high to me!

I'm not in the newspaper industry, so this is just a shot in the dark...but I thought I've read where newspapers get a bit of revenue from advertising (almost to the point where the fee you pay for delivery/at the newsstand almost doesn't even cover the cost of producing it and delivering it - it's from the ads and inserts that brings in the $$$).

As such, an on-line edition would probably have subscribers read fewer stories, on average. And since the newspaper would know exactly how many subscribers read which articles, they would be able to translate that into advertising revenues per page view. And if you have, on average, fewer on-line readers reading fewer articles, you won't be able to bring in as much advertising revenue.

Compared, say, to an entire hard copy newspaper charging an advertiser a certain $ per circulated hard copy. Perhaps they figure that if someone buys a hard copy, they'll be more likely to read more of the paper...and, subsequently, read more of the articles and ads....which, overall, brings in more total revenue compared to fewer on-line articles generating advertising only off of whichever pages and articles are read.

 

[Animorph]

WSJ online finally crossed my value limit. I didn't renew this year. Turns out I can still do pretty well with just their free stuff. Don't want the print version, which might be a little cheaper now. I do get the print version of the local paper, though I read much of it beforehand online for free.

 

[ziggy29]

It's also a fairly new concept and I think many publishers are still trying to figure out how to "optimally" price it so as to maximize revenue. Unlike printed material, the incremental cost of one extra subscription is essentially zero to them, so it's easier to "make it up in volume" when you lower the prices. But on any price/demand curve -- often resembling an upside down parabola with a certain price point that maximizes revenues -- it's certainly possible to lower prices beyond the point that would maximize revenue.

 

[omni550]

I've been reading the NYT online (my daily read with breakfast and coffee)...but decided that the $15/mo fee was more than I care to spend, so I just cancelled it.

I will miss seeing its link sitting in my inbox every day.

I did just find out that our state eLibrary has the NYT available online (the day after it is 'published'). I'll have to see if that works for me.

omni

 

[anethum]

Husband won't even consider an online subscription; must have his messy newsprint. He gets NYT weekend delivery - just Saturday and Sunday - $46 every 4 weeks. WashPo daily delivery is costing us $57 every 6 weeks. Both keep raising the price. ....

The WashPo price is very negotiable. I found this out a few years ago when they increased my home delivery price once too often and I called to cancel. They offered me a much lower price and haven't raised it since. I'm paying $37.65 for 8 weeks (7 days a week). I found out that my parents were paying 47% more than me, so I called on their behalf and they're now paying what I pay. And just recently, I found out that a friend is paying about 1/3 less than me, so I'll be calling again soon.

They've lost so many subscribers that they will agree to lower prices to keep the remaining ones. Have you noticed they don't even publish the home delivery prices on page A2 the way they used to?

 

[Mulligan]

It's also a fairly new concept and I think many publishers are still trying to figure out how to "optimally" price it so as to maximize revenue. Unlike printed material, the incremental cost of one extra subscription is essentially zero to them, so it's easier to "make it up in volume" when you lower the prices. But on any price/demand curve -- often resembling an upside down parabola with a certain price point that maximizes revenues -- it's certainly possible to lower prices beyond the point that would maximize revenue.

They better be careful with their price points since the online pay pages are competing directly with their free counterparts. Plus you have the more recent generations who haven't paid for any type of newspaper subscription and advertisers can find people other ways online already. Being a newspaper guy, I hate to say this, but I see a death spiral in this business that will leave few players in the future.

 

[ziggy29]

They better be careful with their price points since the online pay pages are competing directly with their free counterparts. Plus you have the more recent generations who haven't paid for any type of newspaper subscription and advertisers can find people other ways online already. Being a newspaper guy, I hate to say this, but I see a death spiral in this business that will leave few players in the future.

I do agree but I also question how much staying power the "free" 100% ad-supported business model can have. For one thing, I just don't know there will continue to be enough money *only* on the advertising side to remain profitable with a free model. For another, it's often easier with software to "block" online advertising, and that dilutes the value of each subscriber or viewer. (Having said that, this can be offset -- you can't, for example, "click" on a print ad and go straight to the advertiser's web site where you can directly sell stuff. That certainly adds value to online advertising. So it does go both ways.)

 

[plex]

I'm from the post-paper generation, and I read articles all the time. The thing is, they are all easily accessible online, usually fact-filled, well-written articles about subjects I'm interested in, not just a bunch of random stories in a general category thrown together, most of which are not very interesting. And it is free.

I, (and probably 90-95% of the people in my very general age range), just don't see any value in the old newspaper model. I have a hard time paying for anything when its competition is free, and usually better.

 

[bssc]

I agree, being cheap, I don't read any site that charges. The Post is on my list since I used to live in Washington. I also read the local paper, the AZ Republic, and BBC for a different point of view. I click the ads now and then, as long as they are to reputable companies.

 

[clifp]

I have been online subscriber to the WSJ since the beginning. Initially it was $79 which I thought was reasonable. For most of the past 10 years the WSJ and I have been playing a game where they try to renew me at the list price and I call up and complain cause there is almost always a new subscriber deal at 30% cheaper. I cancel search the web and come back as new subscriber a week or two later.

For the first time I think ever they didn't do this so I renewed at $129. To me anything over $12/month $150 is to much. My local lousy newspaper wants $15/month and I just laugh.

One interesting thing I've observed is that iPad/Kindle version of newspaper iand magazines s often significantly higher than the web version or the dead tree version.

 

[Amethyst]

Thanks for the tip and the data. I'll give negotiation a whirl, but we're on a low-density delivery route (everyone has 3-5 acres - few people on a street) so I doubt they will give in very much. I'm sure it's not easy to find delivery people. They can't afford to live here themselves, and are all using/abusing their own cars and gas.

A.

The WashPo price is very negotiable. I found this out a few years ago when they increased my home delivery price once too often and I called to cancel. They offered me a much lower price and haven't raised it since.

T

 

[Mulligan]

I do agree but I also question how much staying power the "free" 100% ad-supported business model can have. For one thing, I just don't know there will continue to be enough money *only* on the advertising side to remain profitable with a free model. For another, it's often easier with software to "block" online advertising, and that dilutes the value of each subscriber or viewer. (Having said that, this can be offset -- you can't, for example, "click" on a print ad and go straight to the advertiser's web site where you can directly sell stuff. That certainly adds value to online advertising. So it does go both ways.)

It just seems once something is out there free, its hard to reign that back in and condition the masses to pay. I could be wrong, but I don't think the masses under 40 are not conditioned to read news in any in-depth manner, and what they catch from the headlines of yahoo or msn suffices. The newspapers are caught in the middle between the future and the past. Moorebonds is probably correct that the subscription prices are loss leaders to keep ad circulating dollars up. Many educated people I know only get the sunday edition and that is only for the coupons. Even on this thread we are getting differences of opinions on perceived value from newspapers. Several have said they wont pay the $15 monthly because its not worth it. I pay $15 and think its a steal because single editions are a buck and my town is 50 miles from the print site, so I feel lucky to get it at that rate. But then again, I enjoy reading morning paper as it is a ritual to me with my coffee. Others could care less.

 

[ziggy29]

It just seems once something is out there free, its hard to reign that back in and condition the masses to pay.

TV? People were getting "free" TV off the antenna for decades but most willingly started paying for cable in the 1970s and 1980s. (And yes, interestingly, the Internet and other technological advances and stgreaming video with Netflix and Hulu among others have fewer and fewer willing to pay for TV again, but when the "pay" model first started coming out for cable TV, it worked.)

More to the point is whether or not the free services can sustain a profitable business model. If they can't, they go under and consumers either pay for content or do without. We certainly aren't there yet, but we could be. Most likely, IMO, most "free" content will go under but those that survive will command enough of a readership that they will be able to charge enough for ads to make it work.

 

[Bestwifeever]

We still subscribe to our metro area print newspaper. Always have and will as long as there is home delivery (which is a separate charge). Our grown kids? Never have, never will.

The main stories in each morning's paper are online the night before, still free (although you now have to register to read some of the content, there is no cost to do so. Some online content I believe is now restricted to people with either a print or digital subscription). I guess the reasoning is that the paper has to put the main stories online asap to be competitive with other online news sources, but an odd business model to give the content away for free before the paying customers receive it. No wonder the press is going down the drain.

 

[MooreBonds]

TV? People were getting "free" TV off the antenna for decades but most willingly started paying for cable in the 1970s and 1980s. (And yes, interestingly, the Internet and other technological advances and stgreaming video with Netflix and Hulu among others have fewer and fewer willing to pay for TV again, but when the "pay" model first started coming out for cable TV, it worked.)

But when you have free TV as your only choice, and suddenly there's a cable company in your area (just one company) offering a huge increase in available, very unique channels, you are able to offer a service at a premium price (with a high-cost cable infrastructure to build out and force subscribers to pay for, in addition to content). Back in the 70s and 80s, you couldn't simply call/surf/browse to another cable company or content provider for their channel offering.

Compare that to the internet today, where content providers (newspapers) have no infrastructure cost to recoup to deliver the content - but they have a HUGE number of competitors to compete against with similar content (some of which are free).

 

[Mulligan]

TV? People were getting "free" TV off the antenna for decades but most willingly started paying for cable in the 1970s and 1980s. (And yes, interestingly, the Internet and other technological advances and stgreaming video with Netflix and Hulu among others have fewer and fewer willing to pay for TV again, but when the "pay" model first started coming out for cable TV, it worked.)

More to the point is whether or not the free services can sustain a profitable business model. If they can't, they go under and consumers either pay for content or do without. We certainly aren't there yet, but we could be. Most likely, IMO, most "free" content will go under but those that survive will command enough of a readership that they will be able to charge enough for ads to make it work.

You very well could be correct, Ziggy. My thinking is going down to the lowest common denominator of the masses in relation to only reading the news. It seems like the masses aren't particularly interested in paying for it and would do without before paying. TV shows, movies, and sports however are a passion! Also in your defense, I have read WSJ is one of the few that are making money off this model, so it can be done. It just seems invariably just like 30 years ago when the afternoon papers went away and only the morning ones remain, there will be even more consolidation of news regionally.

 

[Goonie]

I used to read the NYT online on a fairly regular basis, until they started charging for it. I've never read it since then. Our local lousy paper (which covers about a 25 mile radius' though has extremely little coverage of our city, which is not only the largest town in the area but also larger than many of the other towns all put together) kept raising prices, while their inept delivery people kept getting worse and worse. They also permanently laid off (fired) about 85% of their local employees, and shipped the set-up and printing to the 90 miles away to one of their affiliates. So I cancelled home delivery, and we just read what little was worthwhile online....2-3 articles per week.

Last month they started charging to read their rag online for (IIRC) $12 per month. Ummm, NOPE!!! It isn't worth anywhere near that amount! I've also read the paper from a nearby town about 15 miles away, which also prints the important NEWS (not fluff) of other nearby communities, including ours. They just started charging for their online edition last week, at a very modest $8 per month. For a buck more ($9 per month) you can add home delivery of their dead tree version! I opted for the online only deal, which allows you to read the standard online edition and/or read or download a PDF version which is an identical copy (with ads, comics page, and the whole nine yards) of the actual daily paper. I love it!!!

I also read (for free online) the Chicago Daily Herald, USA Today, the Daytona Beach News-Journal, the Quad-Cities Times, and bits and pieces of a few other small-town newspapers. And on my iPad and iPhone I have apps for most of those as well as for news from some TV stations and networks.

 

[ziggy29]

But when you have free TV as your only choice, and suddenly there's a cable company in your area (just one company) offering a huge increase in available, very unique channels, you are able to offer a service at a premium price (with a high-cost cable infrastructure to build out and force subscribers to pay for, in addition to content). Back in the 70s and 80s, you couldn't simply call/surf/browse to another cable company or content provider for their channel offering..

When cable first came out, they didn't add additional channels in many cases. They just provided a better picture (in some cases) for the existing over-the-air channels.

It wasn't until the early 1980s that we really started seeing a few cable-only channels to add additional content value.