Higher prices in small steps
Print media Every year, newspapers increase their subscription prices. This time by 1.8 to three percent. They have little time for the kind of price hikes that the K-Group would like to see.
Print media Every year, newspapers increase their subscription prices. This time by 1.8 to three percent. They have little time for the kind of price hikes that the K-Group would like to see.
Next year, the annual subscription to Südostschweiz (SO), Graubünden edition, will cost CHF 15 more, while the Bund will only charge CHF 3 more. The price increases of the other larger newspapers are somewhere between these two amounts, although the subscription prices of Tages-Anzeiger (TA) and SonntagsZeitung (SoZ) have not yet been fixed. In contrast, the prices for individual sales (EV) remain at the previous level almost everywhere, with only the Bieler Tagblatt (BT) increasing by 13.6 percent and Blick already raising its EV price by 20 percent to CHF 1.80 in October.As different as the absolute subscription price increases are, the difference to the current subscription price is generally between 1.8 and 3.6 percent. The SO is also out of the ordinary here - depending on the issue, it will increase by up to 5.1 percent. Publishing director Beat Ravaioli explains this primarily with the rising postal rates. "We deliver around 60 percent of our subscriptions via the post office," he explains. At Berner Zeitung (BZ) and St.Galler Tagblatt (SGT), the post office is also a reason for the subscription increase. The Neue Luzerner Zeitung (Neue LZ), the BT and the Bund, on the other hand, cite "inflation" as the reason.
Elsewhere, the Basler Zeitung (BaZ) recently informed its readers that it was raising the annual subscription price "to ensure the quality of reporting". Due to falling advertising revenues and despite cost-cutting measures and process optimizations, quality limits had been reached "that must not be undercut". SGT Publishing Director Daniel Ehrat also justifies the subscription price increase with, among other things, "maintaining performance despite declining advertising revenues". NZZ publishing director Tobias Trevisan goes one step further, citing structural reasons in addition to economic ones: Among other things, due to the migration of classified ads to the Internet, he expects revenues from this area to decline in the medium term, he says. "We therefore feel compelled to pass on a larger share of the costs to the newspaper's readers." Ueli Eckstein, Head of Print Media at the AZ Group, adds: "From a strategic point of view, the share of reader market revenue must be given greater weight."
Cautious price adjustmentsThe reasoning of AZ, BaZ, NZZ and SGT is not surprising, as they took part in a study last year (see box) that gave them a free pass for further subscription increases. Basically, the study confirmed what experience had already shown: In individual years, some titles had dared to increase subscription prices by up to eight percent (SonntagsBlick, TA, SO - SoZ even risked plus 16 percent once) - without their circulation taking a hit as a result. This year, no title is going that far out on a limb.
Some publishing managers are convinced that they "could actually make a bigger impact". In view of the current economic situation, however, they are cautious. Bund publishing director Pepe J. Wiss puts it this way: "In the long term, the reader will have to pay a larger share, but this point is irrelevant for the current price mark-up."
However, it is also worth taking a look away from the current price increase to the long-term development of subscription prices and their relationship to the EV price - a point that the K-Group repeatedly points out. It is clear that the publishers are not pursuing a uniform strategy: Since 1996 and 1997 respectively, NZZ, AZ, SO and also Blick have raised both prices by a similar amount, while BZ, Bund and Neue LZ have made the EV price significantly more expensive than the subscription price. BaZ, on the other hand, did the opposite, and SGT even left the EV price at the 1996 level, but increased the subscription price by 24 percent.
On the one hand, these differences reflect the importance that the individual publishers attach to the EV. Ehrat, for example, openly states that with a share of two percent of the SGT circulation sold, the EV plays an "insignificant role" in the earnings situation. Elsewhere - in Bern, for example - the competitive situation is likely to have led to parallel price trends for the Bund and BZ. The fact that both titles also raised the EV price more significantly than the subscription is probably due to the fact that they already had a proud subscription price of 307 francs in 1996. By way of comparison, the NZZ only charged three francs more back then, and the TA only cost 265 francs - the same as Blick.
However, the different pricing strategies cannot hide one thing they have in common: Publishers sell their newspapers up to 55 percent cheaper with a subscription than with a PA. The exceptions are the Sunday press titles, where the two prices differ by just 10 to 15 percent. The latter is "due to the fact that the Sunday delivery corresponds to an additional service", explains Tobias Trevisan.
Very few publishers are sympathetic to the K-Group's long-standing request to increase the price of subscriptions to daily newspapers compared to the EV price (see interview). On the contrary: "The subscription price and the EV price should continue to differ greatly in future. This is because the EV sector involves some additional costs with returns, newsstand posters and special transportation," says Beat Ravaioli, speaking from the heart of his colleagues. "The
Returns are a cost factor that should not be underestimated," says Jürg Brauchli, Head of Newspapers at Tamedia. And Tobias Trevisan adds: "With a subscription, the customer pays for 300 issues in advance. An advance payment and volume discount is well justified. This roughly corresponds to the margin of Kiosk AG."
Price elasticity studyNewspaper subscribers are not very price-sensitive when it comes to press subscriptions. When asked spontaneously, they can neither name the current price nor the date of the last increase. This is the result of a "price elasticity study" conducted by the Prognos Institute in 2002.
was carried out. The study was published by the Neue Zürcher Zeitung (NZZ)
Several other publishers took part, including the Tages-Anzeiger, the St.Galler Tagblatt, the Neue Luzerner Zeitung, the Basler Zeitung and the Aargauer Zeitung. The study report was divided into two parts: The result on the overall market was sent to all
study participants, the region-specific and title-specific
Only the relevant study participants received the results. NZZ Publishing Director Tobias Trevisan can only formulate the main finding in general terms: "There is still potential for increases in subscription prices, although this varies from title to title." (mk)
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Next year, the annual subscription to Südostschweiz (SO), Graubünden edition, will cost CHF 15 more, while the Bund will only charge CHF 3 more. The price increases of the other larger newspapers are somewhere between these two amounts, although the subscription prices of Tages-Anzeiger (TA) and SonntagsZeitung (SoZ) have not yet been fixed. In contrast, the prices for individual sales (EV) remain at the previous level almost everywhere, with only the Bieler Tagblatt (BT) increasing by 13.6 percent and Blick already raising its EV price by 20 percent to CHF 1.80 in October.As different as the absolute subscription price increases are, the difference to the current subscription price is generally between 1.8 and 3.6 percent. The SO is also out of the ordinary here - depending on the issue, it will increase by up to 5.1 percent. Publishing director Beat Ravaioli explains this primarily with the rising postal rates. "We deliver around 60 percent of our subscriptions via the post office," he explains. At Berner Zeitung (BZ) and St.Galler Tagblatt (SGT), the post office is also a reason for the subscription increase. The Neue Luzerner Zeitung (Neue LZ), the BT and the Bund, on the other hand, cite "inflation" as the reason.
Elsewhere, the Basler Zeitung (BaZ) recently informed its readers that it was raising the annual subscription price "to ensure the quality of reporting". Due to falling advertising revenues and despite cost-cutting measures and process optimizations, quality limits had been reached "that must not be undercut". SGT Publishing Director Daniel Ehrat also justifies the subscription price increase with, among other things, "maintaining performance despite declining advertising revenues". NZZ publishing director Tobias Trevisan goes one step further, citing structural reasons in addition to economic ones: Among other things, due to the migration of classified ads to the Internet, he expects revenues from this area to decline in the medium term, he says. "We therefore feel compelled to pass on a larger share of the costs to the newspaper's readers." Ueli Eckstein, Head of Print Media at the AZ Group, adds: "From a strategic point of view, the share of reader market revenue must be given greater weight."
Cautious price adjustmentsThe reasoning of AZ, BaZ, NZZ and SGT is not surprising, as they took part in a study last year (see box) that gave them a free pass for further subscription increases. Basically, the study confirmed what experience had already shown: In individual years, some titles had dared to increase subscription prices by up to eight percent (SonntagsBlick, TA, SO - SoZ even risked plus 16 percent once) - without their circulation taking a hit as a result. This year, no title is going that far out on a limb.
Some publishing managers are convinced that they "could actually make a bigger impact". In view of the current economic situation, however, they are cautious. Bund publishing director Pepe J. Wiss puts it this way: "In the long term, the reader will have to pay a larger share, but this point is irrelevant for the current price mark-up."
However, it is also worth taking a look away from the current price increase to the long-term development of subscription prices and their relationship to the EV price - a point that the K-Group repeatedly points out. It is clear that the publishers are not pursuing a uniform strategy: Since 1996 and 1997 respectively, NZZ, AZ, SO and also Blick have raised both prices by a similar amount, while BZ, Bund and Neue LZ have made the EV price significantly more expensive than the subscription price. BaZ, on the other hand, did the opposite, and SGT even left the EV price at the 1996 level, but increased the subscription price by 24 percent.
On the one hand, these differences reflect the importance that the individual publishers attach to the EV. Ehrat, for example, openly states that with a share of two percent of the SGT circulation sold, the EV plays an "insignificant role" in the earnings situation. Elsewhere - in Bern, for example - the competitive situation is likely to have led to parallel price trends for the Bund and BZ. The fact that both titles also raised the EV price more significantly than the subscription is probably due to the fact that they already had a proud subscription price of 307 francs in 1996. By way of comparison, the NZZ only charged three francs more back then, and the TA only cost 265 francs - the same as Blick.
However, the different pricing strategies cannot hide one thing they have in common: Publishers sell their newspapers up to 55 percent cheaper with a subscription than with a PA. The exceptions are the Sunday press titles, where the two prices differ by just 10 to 15 percent. The latter is "due to the fact that the Sunday delivery corresponds to an additional service", explains Tobias Trevisan.
Very few publishers are sympathetic to the K-Group's long-standing request to increase the price of subscriptions to daily newspapers compared to the EV price (see interview). On the contrary: "The subscription price and the EV price should continue to differ greatly in future. This is because the EV sector involves some additional costs with returns, newsstand posters and special transportation," says Beat Ravaioli, speaking from the heart of his colleagues. "The
Returns are a cost factor that should not be underestimated," says Jürg Brauchli, Head of Newspapers at Tamedia. And Tobias Trevisan adds: "With a subscription, the customer pays for 300 issues in advance. An advance payment and volume discount is well justified. This roughly corresponds to the margin of Kiosk AG."
Price elasticity studyNewspaper subscribers are not very price-sensitive when it comes to press subscriptions. When asked spontaneously, they can neither name the current price nor the date of the last increase. This is the result of a "price elasticity study" conducted by the Prognos Institute in 2002.
was carried out. The study was published by the Neue Zürcher Zeitung (NZZ)
Several other publishers took part, including the Tages-Anzeiger, the St.Galler Tagblatt, the Neue Luzerner Zeitung, the Basler Zeitung and the Aargauer Zeitung. The study report was divided into two parts: The result on the overall market was sent to all
study participants, the region-specific and title-specific
Only the relevant study participants received the results. NZZ Publishing Director Tobias Trevisan can only formulate the main finding in general terms: "There is still potential for increases in subscription prices, although this varies from title to title." (mk)
Markus Knöpfli
