Here’s a challenge for those who consider themselves web-savvy: tell me the
weekly home delivery rates for the New York Times. If you can’t do that, then
give me the weekly home delivery rates for any other newspaper, along with a
link to the page where they’re listed.
I have something of an advantage, in that I already get home delivery of the
New York Times, which means that I have a login to various bits of the website
which require a username and password to see. But still I can’t find
a page anywhere with the rates on it. Of course, it’s easy to find introductory
rates for the first 12 weeks of a subscription, but there’s no indication of
what the rates will be thereafter.
The only page I can find is this
one, which tells us that home delivery rates went up from $4.25 per week
in 1989 to $4.50 per week in 1990. Using the Minneapolis Fed’s inflation
calculator, we can determine that $4.50 in 1990 is equivalent, in real terms,
to $6.97 today. On the other hand, in 1990 the New York Times had much less
competition, and no one was getting their news off the internet for free –
which meant that the Times could basically, as a monopoly, charge whatever it
wanted. Today, anybody who gives up a subscription can get 95% of the same content
for free, and the other 5% for $49.95 per year, or just under a dollar per week.
So one might expect that the price of home delivery would have gone down.
But one would be wrong. It hasn’t gone down in nominal terms, and it hasn’t
gone down even in real terms. In fact, according to a slip of paper which fell
out of my newspaper today, the price for weekly delivery of the New York Times
is now going up to $9.90 – which works out to $515 per year. That’s an
increase of 42%, in real terms, since 1990.
Obviously, the Times is a little bit embarrassed by this, since it reveals
its rates nowhere on its website. $515 per year is a lot of money, and I think
that many Times subscribers might be shocked at how much they’re paying on an
annual basis, if they ever bothered to work it out. (One cute little trick the
Times has which makes the rate seem a little cheaper: it bills every four weeks,
rather than every month.) But I have a more theoretical question, now that I’m
what kind of economic theory would predict rising real prices in a period of
vastly increased competition?