Digital inroads among advertisers and the steep plunge in ad
pages during the recession have both given magazines every
incentive to increase subscription prices.
"If you look at the revenue stream of a magazine, there are two
significant ones: advertisers and consumers," said Gary Foodim,
VP-consumer marketing at Conde Nast, which publishes magazines
including Vogue, The New Yorker and GQ. "You want to set yourself
up so you can withstand any cyclical changes. You don't want to
rely too much on any one source of revenue."
But decades of using low prices to chase big circulations, all
the better to reel in advertisers and their dollars, have made
price hikes a risky proposition. As much as the recession hammered
home the peril in depending too much on advertising, it made asking
consumers for more money a tough prospect as well.
"It's not an easy task," said Dave Leckey, exec VP-consumer
marketing at American Media. "It's slow in coming. But we feel we
need to support our business model by getting the consumer to pay
its fair share."
There is some progress. American Media increased introductory
prices on Jan. 1 by 16% at Star, 20% at Shape, 25% at Natural
Health, 50% at Men's Fitness and 80% at Fit Pregnancy. Rodale said
it has increased subscription prices for Women's Health and
Runner's World in the last month.
Meredith, the publisher of magazines such as Family Circle and
Parents, said it is testing some higher subscription prices but
declined to elaborate. Other publishers also regularly test
But cheap remains the prevalent price point. Last week you could
find deals on Amazon valuing Redbook at 25 cents an issue -- or $3
a year -- as well as Entertainment Weekly at 29 cents an issue and
SmartMoney at 42 cents an issue, as long as you agree to let the
subscription automatically renew.
"This price is a limited online offer we make from time to time
to attract new subscribers who agree to an auto renewal program,"
said Entertainment Weekly Publisher Jason Wagenheim. "From our
experience, there is great long-term value with these subscribers
and this introductory offer is considered an investment against a
future relationship with them."
Special deals aside, current introductory offers still ask just
33 cents an issue for Parents, 36 cents for Time, 50 cents for
Better Homes & Gardens, 53 cents for Woman's Day and 55 cents
Publishers say their best hope for increasing prices is to
bundle in digital access, the way Sports Illustrated began doing
with the All Access package it introduced in February. For $48 a
year, All Access includes print, web and Android app editions.
Sports Illustrated's introductory print-only subscription, by
comparison, costs $39 a year. The title plans to eventually
eliminate the print-only subscription option.
"It's difficult to take existing products in this kind of
environment, with some consumers watching their spending carefully,
and raise prices without adding value," said Steve Sachs, exec
VP-consumer marketing and sales at Time Inc.
Publishers might also promise their premium subscribers special
one-offs for tablets that wouldn't have been economical to publish
in print. "These platforms are the first time we have an
opportunity to offer targeted apps, targeted content, in a way you
couldn't do before," said Mr. Foodim, the Conde Nast consumer
Tablets could reshape our perception of subscription prices,
which consumers typically evaluate in annual terms. "The App Store
has created a different consumer perception about pricing: monthly
instead of yearly," one magazine exec said. Charging $2.99 or even
$1.99 a month is still a discount from the cover price, but would
add up to a higher annual price.
If publishers, abetted by an improving economy and new digital
platforms, do eventually succeed at increasing subscription prices,
the next question is whether they stick to it.
The industry is constantly rebalancing between chasing
advertising and healthy circulation economics, said Thea Selby,
principal at Next Steps Marketing. "There might be a little bit of
a float up in prices in the next year or so. And then depending on
how strong advertising kicks back in, there's a real pressure on
circulators to get more readers. And the easiest way to get more
readers is to drop your price."