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Pricing at The New Yorker

NewYorker_PricesIt occurred to me the other day that the New Yorker has increased its retail price by over 28% in a year, in two increases of $1 each, so that the price is now $8.99. (See picture.) The Economist, being smarter about those things, doesn't print its retail price on the copies it sends subscribers, but I saw at the bookstore that its retail price is $7.99. I found The New Yorker's price increases interesting for multiple reasons. I'll try to list them below while giving my thoughts some semblance of order.

First of all, I'm sorry to disappoint all The New Yorker fans who read my blog, but I don't think it is worth more than The Economist. Actually, to formulate this in a stronger way, when you use as a basis of judgement whether a publication is important to understand the world we live in today and as a quantitative metric of its importance the retail price it charges its customers, I think The New Yorker is worth less than or perhaps just as much as The Economist, but definitely not more. A lot of articles in The New Yorker are hit-or-miss: some articles are stunningly good (especially those by Alex Ross, Joan Acocella or Peter Schjeldahl) and certain in-depth investigations or profiles fill an important need in today's media landscape (anything by Jane Mayer or Dexter Filkins), and then there are entire issues of The New Yorker that I put straight into the trash bin right after receiving them because there's nothing in the table of contents that makes me want to read. Please spare me the song of "The New Yorker is so great it should charge even more" or variations thereof such as "The New Yorker deserves to be more expensive than a cup of coffee at Starbucks". I don't know what you buy when you go to Starbucks but the cups of black coffee at Starbucks are massively cheaper than $8.99. (They're of the order of $2 and change at Port Authority Bus Terminal. Really.) Heck, I don't even think the venti Frappucino with an extra shot is $8.99. So it's a bit easy to give The New Yorker a free pass on its price just because it's The New Yorker. (I have included a list of recent articles I've enjoyed at the bottom of this post. I swear, there have been plenty.)

My first reaction when I noticed the price increase was: uh-oh, The New Yorker either has money problems or is under pressure by its owners to make more of a profit. (The magazine is published by Conde Nast, in case you're wondering. You'd think, though, that with The New Yorker festival and ancillary merchandise such as books, desk diaries and more, that they'd be among the best positioned magazines to be financially healthy.) But I'm also reading Subscribe Now! Building Arts Audiences Through Dynamic Subscription Promotion by Danny Newman, and if you're ever tempted to buy this book I'll save you the price of the paperback and summarize the book for you in one sentence: subscribers are the solution to all (performing arts organizations') problems.

The long version of the book summary is: subscribers are the solution to all (performing arts organizations') problems and don't believe anyone who says that their performing arts organization can behave differently because every single time the author has been involved in a subscription drive he's been able to help sell many more than expected, put more people in the theater than expected and find more subscribers than anyone thought possible. You've got to admire someone who was able to write an entire book short on specifics around one sentence, but he did, and clearly the man has a very strong track record in sales, both of subscriptions and of his book (which is now a bit dated anyway).

Having the book in the back of my mind, it then occurred to me that perhaps, just perhaps, the increase of The New Yorker's retail price could reflect not any financial trouble or pressure by owners but a desire to push more occasional buyers of The New Yorker toward subscriptions, which provide more financial stability for the magazine and allows for the funding of the in-depth features that have less commercial appeal by the success of those that do. Introductory subscription offers are $12 for 12 weeks (it is interesting that the introductory subscription webpage states that subscriptions will be automatically renewed after the 12-week introductory rate but doesn't state at which rate). Gift all-access (print + digital with archives access) subscriptions are $70 (rather, $69.99) while renewals of all-access subscriptions are $100 per year ($99.99 to be precise), or $2.13 per print issue. So now, even if you only read one New Yorker issue out of four, you are better off renewing your subscription rather than canceling and buying it in the newsstands once in a while. (You can't be too precise with those calculations, though, because the subscription price might increase and you also have to factor in the value of the convenience to get the magazine in your mailbox rather than remembering to trek to the newsstand to buy one and the value of having access to the online archives.)  

It is worth pointing out that the New Yorker operates under an automatic auto-renewal model when you renew online: your credit card gets automatically charged at auto-renewal time. Other magazines offer auto-renewal as an option but let renewing subscribers renew their subscription without auto-renewal. Of course the magazine will refund you if you cancel your subscription later, but it does increase the hurdle for a subscriber to drop out. Which, from a revenue management perspective, is a very good thing. From a customer care perspective, it is maybe not quite as good. If there is also an increase in subscription price, then two things may happen: (1) you may not notice it because they don't tell you in advance and then your credit card is charged and it's done, (2) you may actually begin to think that perhaps since you don't have time to read much of The New Yorker anyway, you could spend the money on something else. On the other hand, for people who do subscriber to The New Yorker, the subscription can be an "identity symbol": they're the sort of people who care about the topics The New Yorker writes about, and will renew no matter what (unless the price really becomes exorbitant), in which case it might be just as well to make auto-renewal automatic because subscribers would then be very price-insensitive.

So what is the summary of this long post?

(1) Revenue management and pricing are topics that fascinate me. Unsurprisingly, I do research in them.

(2) The New Yorker should take a page from The Economist's playbook and not print the retail price on the issues it sends to subscribers, because people like me notice the tiniest things. And then they write 1,200-word blog posts about it and feel very happy about their posts. (Go to point (1) for a refresher.)

(3) The New Yorker is very good at ramping up prices to move people toward a subscription model and keep them subscribed.

(4) Even if you only read one issue of The New Yorker out of four, you're better off staying subscribed.

Finally, as a random idea, The New Yorker should consider having prizes for the best in-depth feature published in its pages in a given year, the way Harvard Business Review does. It could also involve subscribers by running contests where readers would pick the best articles from the online archives over a certain period. It seems to me that the online archives are a bit underused, and their format is not easy to read online, unless perhaps on a tablet. While The New Yorker has published some collections of its articles over the years, there is the potential to do a lot more. Perhaps it could involve subscribers in picking the articles that would be included in some of the anthologies. Another worthwhile question would be how to create more of a community among New Yorker readers and subscribers beyond the New Yorker festival, perhaps through a network of book clubs where people meet and discuss certain articles. Of course it all depends on the objectives The New Yorker has for its readership and how its readers fit into its big-picture strategy. If the goal is for the articles to have maximum impact (either for their intrinsic worth or to keep advertisers happy or both), then strategies to make current occasional readers and subscribers read more articles or read articles in depth might be worth investigating.

Some recent New Yorker articles I think highly of:

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