Some Publishers to Push Up Cover Prices in 2010
Dec 14, 2009
-By Lucia Moses
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Publishers may not have cracked the code on generating paid content from the Web, but several big titles are looking to wring more money from consumers the old-fashioned way: cover prices.
Condé Nast is raising cover prices on The New Yorker, Golf Digest and Teen Vogue in 2010, having already done so at Vanity Fair, Bon Appétit, Condé Nast Traveler and Lucky this fall (click here for a chart of some titles who have already or are planning to raise their cover prices).
Hearst is lifting the cover price of Good Housekeeping, Esquire and Veranda and is considering the same for Country Living and other titles. Wenner Media quietly raised prices on Men’s Journal and Rolling Stone in the fall. And Meredith is eyeing newsstand price increases at flagship Better Homes and Gardens and Ladies’ Home Journal, Family Circle and Traditional Home, while Rodale is looking at doing the same at its health/fitness titles.
“It kind of depends on the brand,” said John McCarthy, senior vp, customer marketing at Rodale. “If we’re seeing natural demand, we have the opportunity to be more aggressive with pricing.”
In other cases, publishers are passing on de facto price increases by cutting frequency and maintaining or raising subscription prices. Thus while Time Inc. is maintaining cover prices across its titles for 2010, Fortune subscribers will pay the same for seven fewer issues as the annual frequency drops to 18 from 25. Hearst’s Esquire and House Beautiful subscription prices will go up in 2010—Hearst didn’t say by how much—while the titles will publish one and two fewer issues, respectively.
This could bode ill for some. John Harrington, editor of The New Single Copy, said his research shows that in the first half of ’09, when single-copy sales plummeted, the success rate of titles that raised cover price, and sold more units, fell by more than half. While in the past, single-copy buyers have accepted price increases, he said, “The sharp downturn in sales has changed the conventional wisdom.”
However, buyers praised plans to increase cover prices, while pointing out that for the most part, those titles don’t have a big newsstand presence. “It’s probably a worthwhile test to see how elastic newsstand prices are, and it’s always a good sales story to tell,” said Barry Lowenthal, president, The Media Kitchen. “It plays into wantedness.”
Scott Daly, executive vp, executive media director, Dentsu America, said that he would look favorably on publishers that attempt cover price increases. “Although I have seen research that supports an opposing point of view, I wholeheartedly believe that consumers who are willing to pay more for content they covet ultimately make better customers for my clients,” he said.
Generally, publishers are being more timid than usual about price hikes, given shaky consumer confidence and a 12 percent drop in single-copy sales in the first half of ’09, when a wholesaler disruption caused many outlets to be without magazines for weeks.
Stephanie Laco, senior vp, retail services at wholesaler giant Source Interlink, said she sees fewer publishers experimenting with price. “I think people are questioning whether the consumers are going to pay,” she said. Publishers selling at Walmart would need the retailer to approve price hikes, she added, a fact that “certainly has to be on the minds of publishers.”
Observers predict that newsstand sales declines will narrow in second-half ’09 but still be down, around 5 percent to 7 percent.
Even Rodale is predicting newsstand sales overall will decline slightly in the second half, some strong titles notwithstanding. “We’re hurting too,” McCarthy said. “If people are not going to stores as much, there are less eyeballs looking at your magazines.”
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