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Plus Report - By Thomas Baekdal - September 2021

How much should a newspaper or magazine cost? It's not the price that defines it

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I'm often asked what price a newspaper or a magazine should be set at, and the answer is that there is no specific answer to this. The right price has very little to do with the actual money you ask people to pay. Instead, it's about what people pay for.

In fact, when we look at the performance of most publishers, there is very little correlation between what price they have set and how well they do.

For instance, if you go to Wired, they are currently offering one full year for $5 for the first year, and $30 the next year. This price is so low that anyone can afford it. Do you have $5? Of course you do. So why doesn't Wired have millions upon millions of subscribers? Well, because it was never really about the price.

At the other end of the spectrum are some of the more expensive newspapers. For instance, here in Denmark, some of the largest newspapers charge €435 per year. That's a serious amount of money, but they too are growing.

So the right price is not defined by the price. It's instead defined by all those other factors surrounding it. And let's talk about what those are.

Please note: In this report, I'm not going to talk about business-to-business publications, because the pricing of those is directly linked to a specific business outcome and what those businesses are. There is a whole other list of complications surrounding that, which I may cover in a future article. But in this report, I'm going to focus on the consumer market.

Disposable income

When it comes to consumer-level newspapers, magazines, podcasts, newsletters, etc, there is really only one thing that defines everything, and that is 'disposable income'.

Every person has some form of income (even those on social security), and a proportion of that is disposable, from which many things have to be paid. So, let's actually look at what this is, and I'm going to use Denmark (where I live) as an example, but you can adjust this accordingly for whatever it is in your country.

I can get a list of what the average person spends their money on from the National Bureau of Statistics, and the first thing we have to do is divide that into necessary and unnecessary spending.

Necessary is, of course, things like essential food, housing, clothes, transportation, health, education, haircuts, insurance, etc. But it also includes communication equipment, like your phone, your laptop, and your internet connection because, let's face it, in 2021, these are absolutely necessary items for any citizen to have. And the unnecessary items are then everything else.

If you turn this into a graph for how much people spend on each, we get this:

As you can see, on average, people in Denmark are spending €11,500/year on unnecessary purchases, which means that there is plenty of money here for people to choose to spend on newspapers or magazines.

But it is here we start to get into real trouble. Because, people are not going to spend that much money just on a newspaper. There are a lot of things that people like to spend money on. And if we look at what those are, we get this:

The largest single expense is 'eating out' (this data is from 2019, obviously the pandemic changed that quite a bit, at least in the short-term). The second largest is travel (all forms). Then we have a huge expense on unnecessary foods (like Coca Cola).

But then we come to the first media expense, which is TV and radio licences. So, these are your public broadcasting licences (if you live in a country that has those), cable TV, but it's also things like Netflix, Disney+, and all the other streaming services.

There is a bit of a question here about how they actually characterize these things. For instance, Netflix seems obvious, but what about YouTube Premium? ...and what about Patreon? When is something a TV licence, and when isn't it?

Then we have a very long list of things until we eventually get to newspapers, and then even further down the list are the magazines.

And remember, this is the average for a household for an entire year. So, even in a very rich country like Denmark, people are only willing to spend €53 for a magazine, and $133 for newspapers. And remember that averages are deceptive too because some people don't have this much money to spend (rich people have a tendency to over inflate an average).

But this brings us back to the cost of a newspaper. Here in Denmark, the cost of a yearly subscription to just a single newspaper is ... €435.

Just stop and think about that for a second. This means that the newspapers have priced themselves so high that it's well beyond the level that the average person is willing to pay for.

If you ask people to pay €435/year for something that, on average, they are only willing to spend €133 for, then you are only able to convince a small fraction of the total audience ... which is exactly what is happening.

Here in Denmark, we have a pretty high rate of people willing to pay for news, but it's still only 16% of the population.

But again, the problem isn't that people can't afford it. They can. They are spending €11,500 on unnecessary expenses. You could get a ton of newspapers for that. The problem is that they don't want to, and they don't consider it valuable enough to spend less money on other things.

It's the same thing for magazines. If I look at the circulation for magazines in Denmark, one of the most popular monthly magazines is Bo Bedre, a magazine about houses/interiors.

It's a pretty great magazine. I purchased a subscription for it for my sister for her birthday. I love it.

But, the regular price for one year is €120. Remember, the average household in Denmark is only willing to spend €53 for all magazine content in total. (Which today also includes newsletters, podcasts, blogs, etc).

Again, just think about this. This one magazine is asking people to pay twice the amount of money that they have allocated for all non-news and non-TV media.

This means that if you were to subscribe to just one national newspaper, and one magazine, you are paying 520% more than the average household is currently willing to spend on all non-TV media.

So this is a problem.

But what do we do about it?

Solutions that don't work

First of all, let's talk about some of the things people say we should do, but that fundamentally don't work.

At the top of this are the people who say "Just make it cheaper. As publishers, you should lower your prices, and by doing that more people will pay and everything will be fine."

This, of course, doesn't solve the problem at all, for a long list of reasons.

Remember that the number I gave you above is the 'average household', meaning that the €133 people are willing to pay for news is only true if you could get everyone to subscribe to just one newspaper.

We cannot do this. It's not even remotely realistic. And so, the €133 is not an indication of what price you should set. Instead, it only defines what the market is doing.

The other problem, of course, is that we don't just have one newspaper, nor are newspapers the only source of information people might be willing to pay for. And suddenly, in order to make that work, you would need to drop the price even lower.

And we cannot do that without also dramatically lowering the cost, while at the same time keeping the quality and overall value at the same level.

This, again, is not possible. At least not without dramatically changing the way we define what a newspaper is. New newspaper startups might be able to do this and become profitable, but it would decimate existing publishers.

And then, of course, we have the problem of a single price. If the market on average is willing to spend €133 on news, that doesn't mean that individual households are actually paying that. Lower-income households would find that price way too high, while high-income households wouldn't even blink.

The solution to this would be some type of dynamic paywall, with a dynamic pricing model, where people pay based on their available income.

We see examples of this with newspapers like the Guardian where people can choose to pay based on whatever they feel they can afford, and/or are willing to spend.

This model does work if you have a very strong journalistic purpose that people want to support, and it does encourage more people from a wider income range to subscribe. But at the same time, generally speaking, it also lowers the total amount of money people are willing to spend. In other words, people often choose to pay slightly less money than they could actually afford.

So, if we have a €133 average today, if every newspaper used this model, we would instead end up with maybe $115 on average. In terms of news participation, this would be a good thing, but in terms of news revenue ... Well, not so much.

(And, again, the reason it works so well for the Guardian really isn't about the price).

One of the really big challenges is that there is actually a really good argument to be made that newspapers should be much cheaper than they are today. I know this is not what you want to hear, but let me explain why.

If you think back to the value that newspapers provided before the internet, you find that it was a very wide range of things. News itself was only a tiny part of it.

I wrote about this all the way back in 2014, but to summarize, in the past, newspapers were our window to the world.

Take something like a local newspaper. Back when I was a teenager, my family was subscribing to the weekly local newspapers. And whenever one arrived, it was kind of an event. We would sit down and look through it. And we didn't really look at the news. Sure there were stories about a car accident, a fire, or maybe the local politicians had done something, but those were not why we gathered around the newspaper. It was about all the other things.

We even read the ads. We would actually sit and read through all of the ads, on purpose, because that was the only way we could learn about what new products were available in our local town.

It was the same with the national newspaper. My family subscribed to a morning newspaper. And, again, the way we consumed it wasn't just because of whatever news there was that day. It was all the other things. I personally loved the science section on Tuesdays, the lifestyle section on Saturdays, and the motor section on Sundays. And again, when you looked through this, you didn't just read the article, you also looked over all the car ads to see all the new cars that the dealers had up for sale.

We did this because newspapers used to be the internet before we had the internet. It was how we learned about not just news, but everything. Want to read a review? Look at the newspaper.

Today, of course, all this has changed because we know how to have a new channel for this. The internet. And suddenly, it looks like this: Massive parts of what used to define the value of a newspaper have moved to other channels.

Let me give you a simple example. Imagine that I wanted to buy a car. Would I then go to my national newspaper to look up which car to buy? No, of course not.

The problem with newspapers is that, by design, they are random articles for random people in a mass-market. So while the articles are fine, they are not specific or focused enough to even remotely be able to compete with what dedicated car sites or channels can offer.

So, if I was looking to buy a car, I would turn to channels such as Fully Charged to learn about it, and to car buying sites like CarWow to buy it. I wouldn't even consider going to my national newspaper to try to find if they had written about a car that I was interested in. And this is just one of many examples.

The result is that the value of a newspaper, in terms of actual consumption and what it is used for, has dramatically changed. Today, newspapers are mainly just used for 'hard news', and most of the news stories are about things that aren't directly relevant to the reader.

If we look at this purely from a value perspective, newspapers are still priced as if we are living in the 1980s, and in terms of time spent, usefulness, and personal impact, it ranks really low. So why are they still priced that high?

Another way to look at this is to just compare internet access cost to newspapers. To give you an example. I pay €34/month for my home internet access. In comparison, the largest national newspaper in my country charged €36/month for a digital subscription, and €71/month for a print+digital subscription.

Just think about that for a second. They are saying that news from just this one newspaper is worth twice that of the entire internet combined.

Obviously, this is not a fair comparison, and there are plenty of things on the internet that you have to pay for as well. But, there is a problem here. Newspapers are priced based on a model that no longer matches how people consume them. And while this is not what you want to hear, I do believe that this is something that needs to change in the future. And I also believe that future news companies will emerge with a new model where news is priced very differently.

For the moment, though, the result is exactly what we see in the market, which is that only a tiny fraction of the total households consider news to be valuable enough to subscribe to at all.

What about bundles?

Another thing that constantly comes are 'bundles'. If we know that 'on average' people are not willing to spend more than €133, then why don't we just create a bundle where people can pay that and get all the newspapers?

The problem, of course, is that this doesn't work either, and I wrote an article about why this is back in 2017, but the fundamental problem is that bundles tend to lower the overall money people pay for something, and with more and more publishers sharing the revenue, the result is less revenue for each individual publication.

The public loves it though. Bundles allow them to pay less money for more content, so of course they like it.

Now, I need to point out that this only applies to what I call random bundles. So, a 'spotify-for-news' bundle fundamentally doesn't work, because it's random publishers. But we have plenty of examples of specific bundles that work really well when used as an upsell.

Let me name a few:

For instance, in Norway, the local newspaper group Amedia have created a bundle that includes all the local newspapers. So, you can either subscribe to just your local newspaper for 199 NOK/month (€19), or upgrade to 'Digital + Everything' for 249 NOK/month (€24).

This works for several reasons.

First of all, this bundle is still limited to only publishers within Amedia, so the revenue share is still going 100% to themselves. Essentially, this is the same model as Disney+. Here you also get the bundles of Disney, Marvel, Pixar, Star Wars, National Geographics, and Star ... but, since it owns all of these, it still means that Disney gets 100% of the revenue.

We see this with the New York Times, where they are bundling their newspaper with NYT Cooking and NYT Crosswords, etc.

And, we see the same thing in the gaming world, where you can subscribe to Ubisoft+ to get all their games as a bundle.

And considering that just one of their games, if you were to buy it as a standalone product, can go for more than $100, this is a bargain for many gamers.

And the pricing model for this is very simple. Ubisoft looked at what gamers bought before. So, many people only bought one game, some bought two, fewer bought three, etc. Combine that with the slow release cycle, not many games are released per year.

And so they set the price at the sweet spot where they can convince 1-2 game buyers to instead become monthly subscribers. Because, for $14.99, they don't just get two games, they get all the games, + all the DLCs and extras, and all future games.

And just like that, Ubisoft is able to convert thousands of people who used to just pay $60-$120 per year to instead be paying $180 per year.

So bundling works when it is an upsell, but bundling does not work when it's just a random package of publications from different publishers.

There is one more critical thing to remember here. All of the above examples have one thing in common. Everything in their bundles is unique.

Take Amedia as an example. Their bundle is full access to all of their local newspapers. This works because each one of these local newspapers are focusing on their local markets. So a newspaper from one part of Norway is not writing the same stories as a newspaper from another part. They are uniquely local.

But imagine if you tried to bundle national newspapers. Now this model no longer works because they are not unique. The news stories in one newspaper are identical to what is in the other newspaper. As I'm writing this, the big stories in the US are Afghanistan and abortion laws in Texas. But it really doesn't matter whether you read about that in the New York Times or in the Washington Post.

It's the same for many magazines. Sure, some of them might have different focus areas, but most magazine articles wouldn't work as a bundle. They are simply too low-end and they are not unique enough.

The key to a successful bundle is, do people have a real need to buy more than one? And would upselling that as a bundle convert more people? For a lot of publishers today, this is simply not the case.

Fixing the real problem

Fundamentally, though, I don't think either lowering the price (except for the problem around newspapers), or creating bundles is really going to fix the problem. Instead, the real problem is about how we get people to pay a larger share of their disposable income to us.

Let me put this into perspective.

Every year, eMarketer does a survey around time spent, and for 2021, it looked like this (with estimates for 2022).

First of all, don't be fooled by the total. Total time is merely how they added up all the numbers. Clearly people are not spending 13 hours on media every day, instead these overlap. But even with that in mind, what you see here is that people spend an enormous amount of time on media every day.

So, if we go back to the graph about unnecessary disposable income, we see this:

Remember, this graph is about things that people don't have to buy. Their fixed expenses, food, clothing, internet access, etc. That's not part of this graph.

So, of all the unnecessary expenses, only 1.5% of them goes to news, and only 0.6% goes to magazine content, whereas TV content does take up a larger chunk.

This is a problem. Why is the share of spending so low compared to how much time people spend with us?

Obviously, there is more than one reason, but we look at TV for the answer to one of them. The TV industry is still able to get people to pay because ... that's what you do with TV.

Everyone knows that if you want to watch something on TV, you have to pay. And this is regardless if it is your old cable TV package, or more modern channels like Netflix, Hulu, HBO, and Disney+.

This is important because we actually see the same thing for newspapers. Back in 2019, Shorenstein Center and Lenfest Institute put together the "Digital Pay-Meter Handbook". In this they measured the performance of 500 newspapers in the US and they found that there was a direct link between how good publishers are at asking people to pay and how well they perform.

In other words, the more we focus on bringing back the culture that valuable media is something you pay for, the more of people's disposable income we will gain.

But notice the word I used. I didn't say newspapers or magazines. I said 'valuable' media. And sadly, today, that's not necessarily the same thing.

Take magazines as an example.

Generally speaking, the magazine industry is still 5-10 years behind the curve. There are a few exceptions, but the industry as a whole is still massively behind.

I still come across magazines that don't even have a subscription strategy. You visit their websites and everything is just free. I also see magazines that do have a subscription strategy, but it is still centered around print ... sometimes to the point that you can only subscribe if you live in a country where they are doing print distribution.

It's astonishing. Everyone else is moving towards subscriptions. Newspapers are doing it, streaming services are doing it, YouTubers and Twitch creators are doing it. Everyone who is creating a Substack is doing it.

So what is the problem with magazines? Well, it's the value.

Let me tell you about two things.

First of all, if we look at how many magazines have optimized over the past years, many of them have optimized for Facebook. The result is a very low-end type of article where you really don't need any skill to do the work.

Like this:

Publishers do this because this type of content is what 'works best on social media' and thereby can drive more traffic.

But does it really do that? No seriously. If I were to ask you what the most successful content on Facebook is, what would you say?

Well, let me answer that for you. It's not this. In fact, it's not any of the things we do as publishers.

We can see this in the latest report from Facebook (which I wrote about here). In this they explain that only about 15% of the views on Facebook are links, of which only a part goes to publishers (the rest goes to brands and other sites).

We also see that posts from pages that people follow, again, only account for about 15% of the views.

In other words, publishers have been spending the past 10 years optimizing for Facebook, only to become the least valuable thing there. Sure, you got a lot of traffic over the years. But from Facebook's perspective, we are not the ones who drive the most activity.

And here is the question:

Would you be able to convince people to subscribe to your magazines if what you publish are quick low-end videos and listicles for what people can name their dogs?

The answer is ... no!

Okay. So is this type of content the most valuable on Facebook? Again, no!

Okay, but wait, you are still getting a lot of traffic from Facebook because of content like this. So are you able to convert the people who visit you from Facebook into actual subscribers? Again, no!

This is the problem that I see as a media analyst. Content like this doesn't work that well on your own sites. It doesn't really work from Facebook's perspective either. And it doesn't work as a link between the two.

But now let me show you the second thing.

When we look at what people are willing to spend more money on, we see that the top spending categories are all about people doing things.

Let me give you a very simple example.

If we look at consumer spending in the category that the Danish Bureau of Statistics call "leisure and sports activities", we can divide it into two: Spectating or participating.

And if we turn this into a graph, we get this:

As you can see, people are much more willing to spend money on participation than on spectating. And this isn't surprising. Another way to think about this is to look at it as relevant. The closer you can get to something that is relevant to people and that people want to do, the more you can get back in return.

And we don't just see this with sport and leisure activities. We see this with everything.

So, think about this in relation to a magazine. The old print magazine was something you would buy once per month, and then you sit down and just casually flip through it as you were reading each page.

That's spectating.

The stories are not about you as a reader. In fact, you have no idea what is going to be on the next page until you flip to it. You are completely passive, nor is there any expectation of any form of action.

So how can we change that? Well, it's simple. You become a service.

I have talked about it many times over the years. Most publisher success stories are about exactly this.

Take something like NYT Cooking. That's a service. It's a tool that you use in your daily cooking adventures.

Another example is a fitness magazine. The old fitness magazines were about giving people something they could sit down and read (spectating), whereas every new fitness media startup is about getting people to stand up and train (participation).

And which one of these models works the best? Well, it's obvious. If you are a fitness magazine, training is your new core service. If you don't offer that, you don't really have a business anymore.

Another example is YouTube. If you ask kids about why they are using it, the majority (according to Ofcom) say that is to learn. That is another form of participation. And try to look for this the next time you are on YouTube. You will see it everywhere.


And then compare this to what you see on the old cable TV channels. The difference is remarkable. Cable TV is not about learning, and you certainly can't participate. Instead, it's about watching TV shows where, as a viewer, you are expected to do nothing.

Or look at Google. Most of my friends in publishing are blaming Google for pretty much everything, but ask yourself, is Google a spectator service, or a participation service? The answer is obvious. It's yet another form of participation.

So, this doesn't just affect people's willingness to subscribe to something. It also impacts the value we give to brands. When do you reach a potential customer? When they are just casually doing nothing, and not thinking about any specific need (like they do when they read news)? ... Or when they have a specific question, problem or a need, and they are actively searching for a solution?

If I was a brand, I would absolutely try to be where people want to find me, and much less so where I'm just a random banner ad next to a random article.

But this also applies to news. There is a good article over at NiemanLab that recently talked about this. They tell the story of how local newspapers are not helping their community, the parents, and the kids about the situation of returning to school.

This is exactly the same problem that I recently talked about in my lecture about solution-journalism and project-journalism.

The role of journalism has changed. People today demand that newspapers are more than just a collection of random news stories that arrive in their mailbox each morning. Today you have to think about journalism as something which is participating in the community it serves.

And so these things are the key to getting people to pay. As I said in the beginning, the real problem has nothing to do with the money. There is more than enough money available in the market for people to pay for the media they use.

We do need to be much smarter about it though. We need to create more specific subscription products for newspapers. We need to think about how we can narrow it down to prepare a future where newspapers are not a random package of everything (because people are not going to use it like that in the future).

You have to find your niches, your communities, and you separate things in a meaningful way so that you can later upsell it to people as a more valuable bonus.

In other words, make it your editorial strategy to participate in your readers' lives.


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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


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