Friday, January 04, 2013

The grubby business of exchanging actual words for actual money

"We believe this is the right price point for our newspaper at this time," said the Guardian's marketing director at the end of 2011 to explain why the price was about to rise from a pound to £1.20. Just over a year later it's going up again, this time to £1.40. "We believe this is the correct current price point," says another statement.

Inevitably the same people will be saying something similar to justify the next price hike in a year's time. What they won't say is what they're bound to be thinking - isn't there something perverse about putting a tax on the declining number of people who support you in order to subsidise giving your content away to people who don't?

I sympathise with the people who have to make these decisions. They're in an impossible position. As demand shrinks the basic product ought to be cheaper, as it is in the record business. In press it works the other way. Cover price revenue is one of the few levers a hard-pressed publisher can pull. They ask themselves whether the rump they're left with will stop buying if they put up the price. They guess a percentage, then close their eyes and jump.

Meanwhile, in another part of the forest, I've been saying for years that some of the people who make airy predictions about new digital business models should leave the security of their banker-funded old media empires and try to walk the walk they've been talking for so long. Andrew Sullivan, probably the biggest political blogger in the English-speaking world, has announced that this is what he's doing. From February 1st his full output will only be available for the payment of a $20 annual subscription.

I'm sure Sullivan's people know all the tricks to ensure that as many as possible of his millions of followers pay the sub. If an old magazine hand may offer an observation to someone entering the real world of trying to part private citizens from the actual cash money in their pocket (in which of course the proprietor of your local car wash knows more than the cleverest person in the Groucho club) it would be this.

Many of your followers will disappear with a wooshing sound the moment you even hint at charging.  A noisy minority will fall over themselves to give you their money and will make sure everyone knows they are doing it. An argumentative minority will hang around to complain that what you're doing is a) morally wrong and b) bad business practice.

Don't worry about any of these groups. The people you have to worry about are the ones who fully intend to subscribe, in some cases think they already do subscribe, but never actually get round to it. They're the ones.


  1. David - here are his stats after one day. One per cent of his readership has subscribed, he says. Some interesting stats also:

  2. Just to put the above into perspective, Andrew Sullivan says:

    "Basically, we've gotten a third of a million dollars in 24 hours, with close to 12,000 paid subscribers (at last count). On average, readers paid almost $8 more than we asked for."

    So that 1% is rather significant...

  3. Interesting post Mr. Hepworth, esp. last two paragraphs.

    My great idea to keep the Guardian in print (I buy it 2/3 times a week) is that they should charge say £100 a year for "write to" access to the comments areas. A significant number of people clearly find this an enjoyable and fulfilling, even addictive activity - it's interesting to see how even an article on, say, the best way to cook fried eggs, will have hundreds of comments.

    I also have a theory that for common posters (?) there is an inverse relationship bwtween number of comments they post and number of print copies they buy - so a decent charge would be some redress.

    And finally, the paper would certainly not be worse with fewer reader comments.

    What do you think?

  4. Interesting, Michael. I heard the chap from the Guido Fawkes blog on the radio the other day talking about how the majority of their 500,000 comments a year came from the same 50 people.

  5. What is the re-subscription model for Andrew Sullivan's blog? I have one monthly magazine subscription and the publishers are determined to hang on to it. I expect to receive a branded umbrella in the post shortly alongside the confirmation for my two year sign up. On the past I have received DVDs of back copies. But what can Andrew Sullivan offer in twelve months time?

  6. "how the majority of their 500,000 comments a year came from the same 50 people...

    hmmm...the interent has changed that 80%/20% rule I read about a while back.
    No doubt Guardian and other papers magazines would reveal a similar pattern.

    Back to the drawing board on saving the Guardian in print I think...

  7. I have never understood a business model like The Guardian's, which gives away free of charge, their entire output, whilst charging for the printed version. the online version is actually far better now than the paper, which is looking thin and desperate. I like their journalism, and their website, but they are shooting themselves in both feet unless they can make their website pay. I tend to think that a micro charge, one which would be so small as to not be an issue with most, might work. And it would discourage the online ranters in the comments.

  8. As one of those people that have to make such decisions I'd make a couple of points.
    The first is that certainly in the sector of publishing I work in (business magazines) in heady days where ad bookings were rolling in merrily we were virtually giving our subs away to pump up volume.
    Secondly, publishers are now being weighed down by increasing paper and print costs, hence pulling the price rise lever.
    The problem for the Guardian is that it has nothing tangible to base the rise on. Most other brands are releasing mobile sites or apps to help justify their hikes. The Guardian only has to look over the Pond at the New York Times to see that erecting a porous paywall is a total no-brainer.