Magazine Pricing Even for the Best Digital Magazines Still an Improvement Opportunity

From throw-away products to bundles to universal pricing, even the best digital magazine publishers are still all over the map

Magazine pricing strategy has certainly evolved over the past couple of years. As recently as 2013, we still believed that universal pricing was the best way to handle print, website and tablet products. Today, we’ve evolved our own thinking and our new best practice is decoy pricing or contrast pricing, which requires different prices for different products.

Interestingly, an article in PCWorld published just weeks before the iPad’s debut in 2010 speculated that publishers would continue their traditional pricing models of $10 to $20 per year … and “I hope that’s the model iPad magazines go with,” added the writer. Of course you would. You’ve been getting thick, glossy, content-rich magazines for pennies since the beginning of time. Why would you want to pay more?

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One of Don’s biggest pet peeves is the decades-long policy that magazine publishers pursued – to maintain rate base – pricing their publications dirt cheap. $9.99 was a common price for 12 full issues of a consumer magazine.

That policy trained generations of consumers to believe that magazines are cheap, throwaway products. This seems to have been restricted to the U.S. When we taught our Digital Publishing Course in London to global publishers a few years ago, eyebrows in the room rose collectively to the ceiling when Don mentioned the prices of some well-known American magazines. They were astonished that any industry would shoot itself in the foot in that way.

Our angst over this issue made us practically float out of our chairs with happiness at the MPA Swipe 2.0 conference where Hearst Executive Vice President John Loughlin declared war on cheap magazine pricing now that digital editions – or as we call them at Mequoda, app editions – are so popular.

What did Loughlin think is a fair price? “19.99 is the start of fair value,” he said, adding that nearly 900,000 Hearst subscribers have already agreed with him. Loughlin isn’t shy about his position: He also sounded this theme when talking to the Wall Street Journal. “I hope that this is the demise of $6 and $7 and $8 and $9 print subscriptions,” he said at the time.

It was a great soundbite, but Hearst still charges $8-10 for most of its print products, and $12 for most of its tablet editions – sold, for reasons we’re unaware of but which we hope they tested – in six-month increments of $6. The company has also recently entered the ranks of decoy pricing publishers, and again, we hope they test this! Subscribers can get both print and tablet editions in an annual bundle for $13, just $1 more than the app edition.

Cosmopolitan, for example, offers these packages in a decoy pricing arrangement:

  • Print: $12
  • Tablet: $12
  • Print + tablet: $13

The design of this page changes, but the pricing has remained the same over the years. Yes, our models tell us that they’ll probably drive more sales for the $13 option and will also generate more sales overall. But the increase in revenue is minimal, compared to other bundle prices.

The $1 increase from print or tablet to the combo package certainly delivers what we call the “no-choice choice,” which is a polite way of saying “no brainer.” But our research shows that a $5 increase delivers the same impact, and you get more money!

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As the model shows, our testing says you can still get more orders and more buyers for the highest-priced offer, even when it’s $5 more than the next price. But as always, test your own offers to find out what works best for your audience.

Meanwhile, as we always like to point out, one of our clients, the Biblical Archaeology Society, happily allows us to use their data to point out the benefits of Mequoda’s Best Practice bundle pricing:

  • $19.95: Biblical Archaeology Review app magazine
  • $29.95: The Biblical Archaeology Society digital library (BAR archives plus 20 years’ worth of Bible Review and eight years of Archaeology Odyssey)
  • $34.95: BAR app edition + BAS library

When BAR launched this pricing structure in 2013, BAS earned $97,000 from the combo offer, the most expensive option. Everything else combined totaled $58,678: $38,322 less than sales from the combo offer all by itself.

As we’ll see in a moment, that kind of success is not pursued by larger publishers.

Meanwhile, another trend showing up among those big players is illustrated by The New Yorker: the three-month offer. The theory behind this strategy is that it lowers resistance to buying by making the commitment smaller. And in the digital era, the costs to renew four times a year rather than once are minimal, so it’s worth testing. Only $1 per week is their schtick. After the election, it went to $0.50 per week, but they promoted it as an election sale offering $6 for 12 issues.

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Or, incentivizing digital subscriptions, like this old example at Bloomberg BusinessWeek, which left no room for deliberation. The whole package for only $5 more, and a $5 gift card to seal the deal.

Bloomberg has since updated its offer. Now you get the whole shebang for $20. They were testing $40 for the whole package back in May 2016 (plus “bonuses”), but now it appears they’ve reduced the price to $20 for 26 issues. They also give you a free interactive issue to try out.



App magazine publishing as camouflage

As the WSJ noted, Hearst was joined in their more aggressive pricing campaign by publishers such as Bonnier, owner of Popular Science and Field & Stream, and by Condé Nast, publisher of Vogue and The New Yorker. In fact, as we’ve written before, The New Yorker has not only raised its prices, it did so in a somewhat surreptitious way by simply attaching a $20 higher price to the magazine, print or app, when it launched its app edition in 2011.

Thus the old $39.99 price for print rose to $59.99, and the tablet edition was priced at $69.99. Nowhere did The New Yorker actually announce a price increase, thus completely camouflaging that extra $20 behind the dazzling debut of its app.

However, The New Yorker has stepped backward with its current offer, which is one price for all three offers – print, app, or the combo package. In essence, this is still universal pricing. Not only that, but those $59.99 and $69.99 prices are gone – at $12 for 12 weeks, as I noted above, the new annual price is $48.

The Economist also joined in this sleight-of-hand. When they abandoned universal pricing in 2012, they took the opportunity to bump the price from $127 to $160 for the bundle, while leaving the $127 price in place for app-only or print-only.

The prices have jumped again, though. A yearly print subscription is now $152, digital-only is $152, and the bundle is $190. Last time we checked back in May, The Economist had a pricing page almost identical to The New Yorker‘s pricing page. This landing page was  an A/B split that I could identify from the URL which went straight for the $12 trial subscription.

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Now this design is standard and no longer a test for the Economist, so the $12 intro offer must be working.

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What makes app magazine publishing worth more? 

Higher prices for both print and app magazines are being accepted by the consumer, and it’s encouraging that consumers are willing to pay more for an app product that, from the outside, looks much less expensive than print to produce. But are app magazines really worth more than the old print magazines? At Mequoda, we really do believe that higher prices for app subscriptions are about more than just correcting decades of underpricing.

App magazines, as Hearst’s Loughlin points out, offer extra value, including instant delivery, enhanced and extra content, and interactivity, not to mention being easily archivable and searchable without taking up space.

It also appears to be important that app magazines are green.

Then there’s the data starting to trickle in showing that tablet owners hit two of marketing’s most desirable demographics: They’re young, and they’re affluent. It’s not often you can get both of those demographics in one product. This two-fer means that the target audience for app subscriptions is more willing to spend money because they have more to spend – and on top of that, they haven’t been trained to think that print magazines are birdcage liners.

How often do you get a win-win situation like that? And oh by the way … Condé Nast has data showing that its tablet subscribers are renewing their subscriptions at a higher rate than print-only subscribers – and they’re also paying higher prices for their renewal subscriptions. By my count, we’re now up to a win-win-win.

At Mequoda we’re sticking with our belief in fair value of print magazines and in our Best Practice of decoy or contrast pricing.

These practices succeed for our niche publishing clients like the Biblical Archaeology Society. They’re content to drive ever-higher revenues for themselves and quietly succeed inside their specific niches with Mequoda’s pricing policies.

At the same time, we’re interested in your experiences. Do you have a carefully thought-out, bulletproof pricing policy? Have you tested the six-month subscription? Or are you still guessing, like the biggest names in the industry? Let us know in the comments below, especially if you have data to share.

Editor’s note: This article was originally published in 2013 and is updated frequently.

    Bentley N.

    Could you also provide the actual circulation numbers for the Top Magazines by Growth in App Circulation?

    Mary V.

    Exactly! Looking forward to seeing more publishers raise those prices!

    Riva E.

    At last publishers are standing up for the value they invest in their content. We look forward to the improved investment in their creative content providers — journalists will thrive in this multi-platform environment.


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