A friend forwarded me the following message in light of the news that The New York Times is raising rates:
Newspapers just don’t get it. They have slipping ad sales….so what do they do…they increase newsstand prices……stupid?
Stupid? Probably. Eventually. Monster recently found out raising rates wasn’t such a great idea, for example. Monster, however, it not The New York Times. In their case, it’s probably a good stopgap.
Here’s why:
Think of the 80-20 Rule, which basically supports that 20 percent of customers are responsible for about 80 percent of your revenue.
Not true for all business, of course, but likely close for the NYT. I’d guess they’re not too concerned about losing cash-flow from the loyalists. They’re wigging about losing it from the 80 percenters. As a result, I’m sure they’re confident raising rates won’t jettison the their biggest fans, while at the same time buying some time and hopefully cushioning the inevitable fall.
Stupid? Eventually.
Popularity: 2% [?]
June 22nd, 2007 at 12:49 pm
It doesn’t make sense to raise rates when your ad sales are slipping. However, giving that the newspaper industry as high costs, such as those huge printing presses, and the people to man them, the cost has to come somewhere.
I will say that these elite newspapers just don’t get it when it comes to the Internet. Either they don’t want to change, or they are afraid to change. They would do far better if they expand their websites with what web users want.
On a side note, I used to be a subscriber of the New York Times, but cancelled due to their hard left agenda. We all know why ad sales are slipping at the Times. Consumers are tired of their loony left position.