Price of a newspaper

Factual Questions
1

How much of the cost of a newspaper is covered by the 35 (or 50 or whatever) cents that you pay? Does this in any way represent the cost of materials, printing, and distribution? Is any of it profit, or does it cost more than the cover price to get the paper to my door (or to the paper box)?

Since the big money comes from advertising space, which is based on circulation, why not give the paper away (increasing circulation, at least theoretically) and increase advertising space? You could still charge a delivery fee to people who want their paper at the door every morning.

I know it’s not that simple, but other non-physical media (like broadcast TV) do quite well without a per-use charge, and most big cities have a free weekly or two which seem to do okay supporting themselves purely with advertising.

2

There is a free daily newspaper in London (The Metro), although it shares content and journalists with another paper (The Evening Standard) that isn’t free. Although advertising must generate a lot of revenue, I would guess that it’s still not enough for large news organisations seeking to make a decent profit and maintain a global newsgathering operation. The free papers seem to be the ones that don’t require journalists around the world (or even around the country) or buy content from newswire organisations.

3

There seems to be some prestige associated with having people actually pay for your paper, at least in some publishers’ minds. The attitude is something like, “Our readers actually pay for the paper and read it. With those free papers, you don’t know how many are reading it and how many are going to people who need emergency fish-wrapping material.”

The actual price charged is heavily influenced by the amount of competition. Here in Trenton, New Jersey, a medium-small market that still has two competing daily papers plus ready availability of the New York, Newark and Philadelphia dailies, the local papers are only 25 and 35 cents. The Newark Star-Ledger is also only 35 cents for a fat paper that must contain at least 35 cents’ worth of newsprint.

4

Another factor is that in some places papers must have a substancial paid distribution to qualify as outlets for legal announcements. Where I live, the “local” paper (owned by a national company), which very few people read, successfully sued to have the local free paper, which everyone at least flips through, disqualified for legal notices because it had no paid distribution.

5

In Houston, the Hearst-owned “Chronicle” bought out the Houston Post a number of years ago, leaving it as the only daily in town. During that time, we have seen the quality of the paper go down (from an already dismal position) and the price rise (from 25 cents to 75 cents daily). Even thought the Chronicle is a horrible paper, it has the market saturated. So in order to make more money, they simply raise the price.

6

I read an online chat with Bob Levey of the Washington Post where he said the cost was $2.60/copy to produce. The Post still charges $0.25 and makes the rest through advertising.

7

Find a different store. The daily Chronicle is $0.50, not $0.75. :slight_smile:

8

Actually, I believe it’s the advertiser’s minds that are more important here.

If you give your newspaper away, your potential advertisers will feel that most of the people you distribute it to don’t even look at it. If people have to pay for it, though, the general assumption is that virtually all of your readers are going to at least glance at it - and at the advertisements it contains.

I believe that’s why newspapers advertise their “paid circulation”.

9

On the one hand you have free newspapers, that can live with just advertising revenue.
On the other hand you have papers folding because the advertising can’t support the paid circulation.

I think in a free market, any per-issue price in between should be equal, if the management does a balancing act between the two business models. Perhaps that means only a couple of daily comics and features, only a couple of non-wire news reports, and perhaps a less than daily circulation.

10

As Mattk has pointed out, here in London we have a free paper, althugh it is essentially a re-hash of whatever Associated Newspapers (who own it) have been putting into their other papers - including the London Evening Standard -over the preceeding 24 hours. They put it out because they can make a tiny bit of extra advertising revenue out of it (advertisers who pay for space in their other rags can be induced to pay a tad more for additional runs in the freebie), but chiefly to strangle at birth any competitors who try to wreck their strangehold on papers for Londoners. There have been a few of these attempts over the years, none successful.

An interesting slant about the OP is the question of whether we should pay for papers and magazines at all. We are accustomed to thinking of the paper being produced for us, and for our benefit. But then you read the ‘advertising rate & data’ card for a paper or a mag, and you see the readers referred to as cattle to be ‘delivered’ to advertisers. It’s all quite cold and calculating. They say things like “We can deliver x 100 thousand ABC1s and C2s each day \ week \ month” whatever. In other words, the paper or mag functions to (a) assist the wealth of advertisers and (b) thereby assist the wealth of the people who own it. We, the purchasers, are just consumers to be sold to, lured in by some pretty baubles. And we pay for the privilege too!

I know everyone here at the SDMB is smart enough to understand the mechanics of periodical retailing. But do get hold of a ‘rate and data’ card - it can have quite a chilling effect to see yourself referred to as fodder for advertisers.

11

Not quite an answer to the OP but… According to Dynamics of Mass Communication, 6th Ed. a newspaper gets 75-80% of it’s revenue from advertising, and 20-25% from subscriptions and single copy sales (p. 112).

12

Hey, a question up my alley! I actually work for a newspaper (a small daily, circulation 6,000) and a quick check around the office reveals that in our case, the subscription revenue and the single copy newsstand sales come very close to covering the actual distribution costs (i.e. postage, circulation manager, area advisiors, motor routes and carriers) but that’s it. It does NOT cover printing costs, editorial costs (news editors, writers, photographers), pay any of the general overhead (heat & lights, rent, insurance, debt reduction, etc.)

Advertising pays for all of the above plus sales costs and any possible profit.

Naturally, what works for us may not generalize up in scale to a large daily, or down to a small weekly.

BTW, some folks talk about the various “free” papers. There are several sorts out there.

The most common is the “shopper” or “TMC product” (TMC being an acronym for Total Market Coverage), which is distributed free (either by mail or carriers) to people in a given area who do not subscribe to the local newspaper.
Shoppers typically have little or no editorial copy, consisting of display ads and classified ads. They came into being in the 50s as a reaction to the rise of TV. Advertisers pointed out that if 60% of the people in your town subscribed to the paper, then to run an ad in the paper was to miss by definition 40% of the potential shoppers. So the newspapers took all the ads from their paid product plus the classifieds, printed them separately and distributed them to non-subscribers. Then they could confidently advertisers that their ads were being delivered to every home in the town.

In a neighboring town there is a small tabloid newspaper with a small amount of editorial content plus display ads and classifiees which is countertopped, meaning delivered to selected stores where it sits in a box or on the countertop and is picked up for free by interested parties.
With hardly any distribution costs (a guy with a station wagon to drive bundles around to the various stores) they can charge fairly low ad rates and still make a small buck.

Then there are the big free papers. Best one I am familiar with is the Willamette Week in Portland, Oregon, a huge fat tabloid weekly (often 128 pages or more) that distributes a claimed 400,000 copies. It has a modearate amount of editorial content, about half left-leaning political commentary and the other half entertainment - music, movies, food, etc. They reportedly do very well financially against a strong daily (The Oregonian) which has significant market penetration for half the state.

Sorry to go on so long. Hope it is of some interest.

13

Our local rag here was bought out by the Gannet Corp, which owns papers like the Today. The paper used to be 35 cents from the machine, less if home delivered. The paper paid the pressmen well, and the reporters not so well, which was probably why the news sucked, leaned heavily into human interest stories about Mrs. Gottrocks cute little hobby of making clothespin dolls, the Flower clubs Tulip dinner, the not-ready-for-any-stage local theater group, and the local High-and-mighty golf tournament for charity, the proceeds to be shipped out to Harvard or Princeton for Executive Scholarships. Great fellows all, aren’t they? (Not a dime for the local homeless, though.)

Paper carriers made 5 cents a paper to home deliver. Those handling the machines made the same. Plus 12 cents a mile (after the manager ran each route to get the exact mileage down so one could not easily pad the mileage reports).

Out of the 35 cents, I figure the paper made a 5 cent profit, multiply that by something like 40,000 papers a day. This does not include profits from advertisements.

Gannet promptly started paying the reporters more, the pressmen less and upped the price at the box to 50 cents a day and upped the home delivery price. At a rough guess, I’d say they’re making 15 cents a day per paper.

The quality still has not gone up. Yesterday I read a whole page about this young resident who plays a concert violin in some orchestra, how she started, how long she practiced, adnauseum. She was kind of homely, lives in the rich area of town and knows no rock and roll stars. On the other local pages, throwing out the bulk of news which no longer concerns our town or national things, you got to read about the cops chasing some transient off of public property, where he was trying to sleep, a mild fender bender, two ambulance runs to the exclusive retirement communities, a guy arrested outside of a bar, in his car, drunk, parked, trying to sober up, but given a DUI anyhow because he had not locked his keys in the trunk and therefore was in control of the car.

Not to mention 24 AA meetings, 2 Alonon meetings, the kid who caught a 4 pound fish picture, Public City Consul meetings – like they ever listen to anyone in the cheap seats anyhow – who is suing who (a section which is almost in need of it’s own page lately) and letters to the Editor.

50 cents is way too much to pay for the thing. Whatever the reporters are getting paid, it’s far too much.

14

however much you pay for each paper (35 or 50 cents) covers the paper and ink. that’s really about it. everything else is paid for (reporters, journalists, machines, whatnot) by ads. otherwise, we’d be paying like $5 per stack of newspaper