The New York Times announced
today that it’s raising its newsstand price in its home city by 33%, to $1.
(Sundays will stay at $3.) The price jump comes on top of a 15-cent price
in September 1999, bringing the total rise over the past three years to 67%.
The Times is now, for those of you keeping score at home, fully 400% of the
price of the New York Post.
As we all know, the main development over that time has been the growth of
the internet, where nytimes.com is one of the leading news websites. Just about
every article the New York Times publishes is available for free on the web,
and you don’t need to schlep to the newsstand or wait until it’s delivered to
your door, either. By the time you’re reading Paul Krugman, Andrew Sullivan’s
rebuttal is already up on the web, posted within an hour or two of midnight.
The decision to price the paper at a buck an issue can’t have been easy. It’s
not pocket change any more: you now need folding stuff if you want to read Monday’s
Metropolitan Diary on folding stuff rather than on the internet. It’s a big
psychological barrier, and places the New York Times solidly as a premium, luxury
product, as opposed to something you might pick up on your way into the subway.
(Talking of the Metropolitan Diary, by the way, can somebody out there with
Nexis do me a favour? Find out (a) the percentage of Metropolitan Diary columns
which include at least one instance of the phrase "without missing a beat";
and (b) the percentage of New York Times stories featuring the phrase "without
missing a beat" which are Metropolitan Diary columns. I’d be most grateful!)
Certainly the price of newsprint has been going up in recent years, but I have
my doubts that paper prices alone could justify newsstand price raises of this
magnitude. The New York Times has also made large investments in colour presses,
which are expensive things, and which in the present advertising climate might
not have generated the extra revenue that was originally projected.
The official reason, or at least the only justification in the press release,
is the addition of "several new features and sections, including the Friday
‘Escapes’ section". Since these sections are wholly advertising-driven,
I’m not convinced: if they weren’t profitable, they wouldn’t exist. The release
also mentions that the metropolitan edition is merely coming into line with
the national edition: that would be more convincing if it wasn’t for the fact
that the New York Times is making a big push to become a national newspaper,
bringing down distribution costs around the country. If anything, one would
think that national prices would come down, rather than metropolitan prices
I think the real reason for the hike is twofold. On the one hand, costs and
revenues are moving in opposite directions: post September 11, the Times has
devoted a lot more resources to expensive international reporting, while ad
sales continue to be in the doldrums. More importantly, however, the Times can
do what it likes. It’s a monopoly, and people will pay whatever they have to.
But I think the internet is having an effect as well. People who buy the Times
will continue to buy the Times, and continue to pay whatever it costs. But they
will also die off steadily. People who have never bought the Times will be increasingly
likely never to buy it, working out, quite rightly, that all the same information
is right there on the web should they ever be interested in it. So to keep revenues
up, the Times is going to have to keep on increasing its price. It’s a curious
inversion of the normal law of supply and demand: here, as demand decreases,
price goes up.
Of course, if there was an alternative,
the New York Times could never get away with this sort of behaviour. But there
isn’t. So we remain at the mercy of the benign patriarchs of 43rd Street.