A new business model for magazines

Ashley Milne-Tyte Aug 11, 2008
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A new business model for magazines

Ashley Milne-Tyte Aug 11, 2008
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Scott Jagow: The latest numbers on magazine circulation come out today. The trend has been that newsstand sales are falling, but subscription levels have been pretty steady — they’re even up in some cases. But that’s not necessarily good news for the magazine business. Ashley Milne-Tyte explains.


Ashley Milne-Tyte: Most magazines offer yearly subscriptions for a fraction of the newsstand cost.

Samir Husni teaches journalism at the University of Mississippi. He says that cut-price move was intended to lure more readers, who in turn would attract more advertisers. And it worked for years. But he says print advertising is on a downward spiral, and magazine publishers need to revise their business model.

Samir Husni: They have to slash the newsstand price. Or they have to increase the subscription price.

He says readers who value a magazine’s content will pay for it.

Husni: Like People Magazine. People are willing to pay $99 to subscribe to People, while, if you subscribe to another magazine from the same company, Time Magazine for example, you can get it for $19.

But celebrity addicts aren’t the only readers willing to pay up. Husni points out that the Economist charges a hefty newsstand and subscription price, and it’s also doing very well.

In New York, I’m Ashley Milne-Tyte for Marketplace.

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