NEW YORK (AdAge.com) -- Magazines that cut their subscription prices to lower and lower levels may be hurting themselves in more ways than we knew.
The less money magazines collect from subscribers, the more publishers depend on advertiser demand for ad pages -- demand that plunged through the floor in the recession and does not seem likely to fully return. Super-low prices may also devalue magazines in the eyes of consumers, some have suggested.
But now it looks like lower and lower prices last decade haven't even roped in more readers. In many cases the magazines that went cheaper still wound up with fewer individually paid subscribers.
Nearly two-thirds of 344 magazines analyzed dropped their per-copy subscription prices between 2002 and the first half of 2009, but nearly 75% of those price-choppers also saw individually paid subscriptions decline anyway, according to an analysis of Audit Bureau of Circulations reports by Jack Hanrahan, the media-agency veteran who's now an industry consultant and publisher of the CircMatters newsletter.
"Paid individual subscriptions are dropping for a lot of titles that have decreased their subscription prices," Mr. Hanrahan said. "It means to me that single-copy sales are not the only thing we should be worried about as it relates to total circulation."
Not a Debbie Downer, but a realist
"It actually made me wary," Mr. Hanrahan said about his findings. "I'm not a Debbie Downer about the publishing business, but I also feel it's important to be a realist."
"What I really think is going on here is that circulations are bloated," he added. "They've been pushed beyond what would be natural demand."
Cheaper prices, in that case, might not have much effect. There are those, of course, that charge significant amounts for subscriptions. In the first half of last year, titles pricing subscriptions at more than $4 per issue included Endless Vacation, Harvard Business Review, Communication Arts, Foreign Arts, WoodenBoat, Fine Woodworking, Fine Cooking, Fine Gardening, Fine Homebuilding, American Scientist, Shooting Sportsman and Robb Report.
But for the most part magazine have hardly been pricing potential readers out of the market. Titles selling subscriptions below 75 cents a copy included US News & World Report, Parents, Newsweek, New York, Time, Woman's Day, Ladies' Home Journal and Family Circle.
Paid-subscription numbers will probably hold their own when the Audit Bureau of Circulations issues its report covering the second half of 2009 on Monday. But there are several components of the "paid" circulation category, as defined by the Audit Bureau's board, and different advertisers value those different components differently. It's not always clear, for example, whether a subscription that came with a couch or blender purchase provides as valuable a reader for advertisers as a subscription that a reader sought out and paid for herself.
At the same time, however, some in the industry have tried to improve their subscription strategies. Many publishers have reduced the paid circulation they guarantee to advertisers, bidding for better circulation economics and less of the marginal readership that advertisers may not want.