Publishers pushing the prices of their print products higher and higher – trend or coincidence?

Survey says trend

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During consecutive sessions at our recent Asian Media Leaders eSummit, we heard two CEOs share how they had raised the price of their print product dramatically in the last year. Surprisingly, they had experienced little to no churn as a result of the increase. Trend or coincidence? We wanted to find out…

Our global survey – We surveyed about 75 publishers from 32 countries all over the world in July with just five questions: Are you a national or regional? Have you raised your prices in the last 12 months? If so, by how much? What impact did it have on circulation? And do you plan to increase prices in the next 12 months?

In summary – About 52% of publishers responding said they were national dailies; about 48% were regional or local. Nearly 65% of publishers participating said they raised the price of their print newspapers in the last 12 months. About 16% of those raised their prices by more than 30%. Nearly 50% saw little or no change in churn, a few even said their circulation increased (dubious? perhaps…). And nearly 50% say they plan to raise their prices in the next 12 months, while 28% say they are contemplating a change. See the charts below.

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Of those publishers that said they have raised their prices in the last 12 months, the majority have done so at a rate between 0-20%, but a significant number have been even more aggressive, 4.4% even raising theirs more than 50%.

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While some publishers have experienced some significant churn after raising their prices, the majority have had churn within a manageable rate, considering the typical YoY decline in print circulation. Yet, there are a number of newspapers that are waiting for results.

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With nearly 50% of respondents indicating that they will raise their print prices within the next 12 months and nearly 29% contemplating a change, it indeed looks like publishers see an opportunity to increase the value of their print products – perhaps not just for the short term. Read below.

Perspective – As news publishers around the world increase their focus (rightfully so) on the transition to a more digital and diversified future, the bridge leading to that day – PRINT – is still the primary platform of revenue for most. In our most recent World Press Trends report (published in early May), our estimates based on our global survey of publishers and PwC’s annual Global Media & Entertainment report data, print makes up 73% of overall income for newspapers; print circulation makes up nearly 42% of overall revenue. Digital makes up 16.4% of total revenue, while digital circulation makes up 5.7% of overall revenue. (It is worth noting that we reported other revenue streams in that report that totalled nearly 21% of overall revenues, a very positive development.)

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So why the increases in print prices?

To squeeze every penny out of print while you can? To offset the increasing costs of materials and delivery – much of that directly related to the Ukraine war? Or is it just more sophisticated pricing strategies: charging more for a valued, increasingly niche product that loyal readers are willing to pay for? Probably a combination of those, but it’s real.

“We are working with over 400 publications on pricing, and the vast majority are raising print prices (see chart below),” said Matt Lindsay, president of Mather Economics, which advises news media and other industries on subscription, pricing and revenue management. “We do see a focus on long-term strategic objectives this year instead of short-term revenue objectives. We help publishers maximize the expected value of the print product operating margins through price increases, bundling, and operational changes (migration to hybrid products, fewer print delivery days, mail delivery options.) We also help them with minimizing churn from non-price reasons

“Print products still represent the overwhelming majority of subscription revenue and operating margins even though it has more costs than digital. The average rates of print are so much higher than digital-only.

“The long-term objectives are maximizing the expected value of the print revenue stream. In recent years, there has been more of a focus on current-year revenue, so there were more aggressive pricing actions on print than what we are seeing now. We are seeing a move to lessen premium-day revenue and additional fees, which are observed to increase churn.”

Pricing specialist Mather Economics benchmarked 400 of its US clients and produced a comprehensive report. This shows the average monthly rate of print pricing, based on circulation, over 2021 and 2022. For the most part, you can see increases YoY.

Globe and Mail, Kompass go all-in

One national newspaper that has been quite aggressive in pricing is The Globe and Mail in Canada. At the Asian event, CEO Phillip Crawley shared how G&M is accelerating growth to higher levels even compared to pre-pandemic. And much of that can be attributed to print, he says.

“While others cut back on print (during the pandemic), we decided it was a good time to invest. It does make a difference. Readers notice. As do advertisers.” Today, The Globe and Mail has 300,000 subscribers, of which 210,000 are digital-only and 95,000 are print subscribers.

The company’s target is 350,000 subscribers – print and digital – by the end of 2023. G&M has flexed its muscles on pricing too: Its weekday paper costs C$ 4 (Euro 2.94), up from C$ 1 (Euro 0.73), 20 years ago. Its Saturday paper retails at C$ 7 (Euro 5.14), up from C$ 3 (Euro 2.20).

The Globe has three subscription packages – Digital access (C$ 1.99/week or € 1.46), Saturday Home Delivery plus Digital access (C$ 6.99/week or € 5.13), and Monday-Saturday home delivery plus digital access (C$ 10.99/week or € 8.07).

“A subscriber buying print and digital will be paying 650 Canadian dollars and upward (about €493) per year. Some people are paying 800 dollars,” said Crawley. “So we work hard to justify this premium pricing, and we do it by spending on quality journalism.”

In 2021, Crawley said the company’s print advertising revenue increased by 8% and print subscription revenue by 1%, a far cry from most other North American counterparts. The brand has managed to ensure that the contribution from print is at an 18% margin level.

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In a panel discussion at the same event, Andy Budiman, CEO of KG Media in Indonesia, which publishes the national daily Kompass, shared his company’s strategy on pricing print. “For us, actually the majority of profit is generated by digital, but print still reaches what we think is the most influential audience in Indonesia, which are decision-makers in private and government sectors. So for us, as long as this audience still reads and trusts our newspaper – maybe even above other platforms – print still has a real influence and a purpose. And as print becomes more and more niche, we have reached a point where we see that the print audience has a high willingness to pay for the product. So this year, we increased the cover price of Kompass by 45%, and we expected that this would result in a huge drop in our circulation. But, in fact, what we see is a far smaller decrease in our circulation than we anticipated. So this clearly shows that they appreciate the product and are willing to pay for it.”

Dean Roper

First published on 11 August 2022 by Wan-Ifra. Reproduced by permission of Wan-Ifra

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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