So much for the penny press

The New York Times raised its daily price to $2.50 today. I thought back to the penny press at the turn of the last century and wondered what such a paper would cost today, inflation adjusted. Answer: a quarter.

Screen shot 2012-01-02 at 11.09.10 AM

So, in inflation-adjusted current pennies, The New York Times today costs 10 times more than a newspaper in 1890. Granted, Today’s Times is better than a product of the penny press. But is it worth 10x? Should it cost 10x?

In the meantime, labor rates have risen (a Timesman today lives better than a Timesman then) but production technology has become far more automated and efficient (no more typesetters, proofreaders, compositors, engravers, stereographers, mailrooms, or “rubber rooms” filled with unneeded pressmen). And the advertising value of newspapers has increased exponentially.

On the one hand, there’s less competition today. The New York Times is essentially a national newspaper monopoly (the Wall Street Journal and USA Today are different beasts). That should enable it to raise its price to such a premium. On the other hand, what’s really at work, of course, is that there’s much more competition today: the entire web. That would drive the paper to lower its price.

Instead, today it raises its price — by a whopping 25% over its old daily price of $2. That’s because it is trying to support an outmoded economic model. The myth of legacy media — rich while it lasted — was that every reader saw every ad so the paper charged every advertiser for every reader. That’s how scale paid off. Those are the economics that led to the rise of the penny press.

Online, that myth has been punctured: (a) every reader does not see every ad, and (b) advertisers pay only for the ads readers see (or in Google click on), and (c) there’s abundant competition. That’s what confounds legacy media folks: “If I get more audience and have more effective advertising, why am I not being paid more?” Because you’re operating by media laws that are now outmoded. You’re still operating under an industrial economy built on scarcity. That’s what makes you think you still have pricing power.

You need to find opportunity in entirely new models, in the new scale, in abundance. Google finds value in scale by taking on risk for the advertiser (who pays only for clicks) and by increasing relevance by putting ads everywhere. Facebook finds value in relationships and data about them and it doesn’t sell content but does use content as a tool to generate more data about users and their interests.

In their day — a century ago — newspapers found new ways to exploit scale. Today, net companies exploit scale in new ways. Google, Facebook, and Twitter are the penny press of today. Only they cost even less.

BTW, thanks to the very good Times Machine, we can see that The Times started life at a penny, which rose to four cents and then back down to a penny by 1900 — because it wanted scale.

  • https://sites.google.com/site/denysyeo Denys Yeo

    How does the growth of the “digital” form of the NYT compare to the “paper” form?

    I currently pay for our local newspaper but increasingly I need to read less and less of the content; by the time the paper is delivered I have already read most of the relevant news of the day, online, from a range of sources.

    Maybe newspapers will move towards “magazine” status for their paper products and attempt to compete online for promoting current “news”? If so, the price for the tangible product will undoubtedly continue to increase.

    • WestWatcher

      Amen, brother.

      I still buy the Denver Post. It’s often unread (25% probably not even unwrapped) precisely because I’ve already read the aggregated content somewhere else. It’s not even that much of a waste of paper anymore, It’s just a few sheets wrapped around the sports section.

      The content is pathetic. The major columnists are of a particularly extreme political streak, with one or two others thrown in for supposed balance. The major columnists they do have rode the competitor, the Rocky Mountain News, into the ground and brought the failed editorial policy with them when they were hired. Smart move Medianews group.

      But I’m old. The print media is semisacred. Every time I write the check I have to tell myself, “You don’t kill ideas by starving the fools that propagate it. Write the check and shut up.” If you don’t feed them, they’ll never get any better.

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  • me

    The Times is an Communist, Marxist, Socialist, Maoist, Progressive news paper

    • me

      yes yes

      • Baldy Kirby from Atlanta

        $2.50 for a rag full of lies?

        Isn’t toilet paper cheaper and more useful?

    • CB

      @me, I would suggest broadening your understanding of terms like Socialist, Maoist, and Progressive. You will find they are not interchangeable. If that is too much work, you could just learn to proofread, or recognize “an Communist…” just makes you sound all the more ignorant.

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  • Michael L

    The Times employs the same twisted economic logic displayed by the average municipality, and the White House: raise the price (public transit, stamps, taxes), and then sit back amazed when demand is suppressed and net revenue declines.

    I purchase our local newspaper, and use a variety of Web-based news outlets for national and international news. The NYT? I’d line my birdcage with it, but:
    1. That would require buying it in the first place.
    2. To do so would insult the bird’s intelligence.

  • GRAM

    That.s still a bargain …You can line the bottom of your birdcage at least 50 times..for $2.50…

  • bill

    Gee I wonder if instead of raising the price if the NYT chose instead not to be a liberal propaganda outlet and reported news if the bottom line would be better?

    Liberalism is a metal disorder so much so that liberals are willing to go out of business rather than actaully doing a good job and just report the news instead of making the news.

  • cabrerski

    Ley’s not forget the evolution of what the legacy media has become. A long time ago, I subscribed to two newspapers, as well as the US News and World Report. I really wanted then, as I do now, to learn all about my surroundings.

    Today’s newspapers are tiny snippets of news surrounded by tons of advertising. In addition, the newspapers increasingly find it acceptable to publish opinion rather than fact throughout the paper and no longer limit it the editorial page.

    But the most heinous “crime” is that of omission. The failure to print negative press on one side, yet ratcheting it up to the other is beyond the pale. The fact reporters will not even pursue the real truth is reprehensible.

    This is why Americans turn to the internet and other sources. They truly want the facts from which they will derive their own opinions.

  • Floyd DaBarber

    Hopefully this latest move puts one of the final nails in the coffin of this dogmatic rag.

    $15.00 a week (not including Sundays) to get the same news one can get for free on-line, and without the predictable Liberal Fascist spin? Only those who robotically flip the “(D)” lever in polling booths could possibly be so dumb.

    Wake up NYT — the only people left who actually pay for things in this country are the ones your Dear Leader is economically raping on a daily basis.

  • Roger Harris

    I used to enjoy reading the ny times up until about 8 or 9 years ago when the times became very biased in favor of democrats in their reporting. As somebody who is very independent in their thinking, the outward biases made me question the accuracy of their reporting. If I was the CEO at the times I would fire half of the staff and replace them with people of all political beliefs. Maybe the. The paper would appear to be more balanced and truthful.

  • MidWestMike

    $2.50 wasted.

  • http://www.HarveyGardner.com Harvey Gardner

    That it, Times, charge more because you’re providing less. Good move!

  • Richard_Iowa

    Eons ago I used to read the NY Times but now, with its liberal bias, I would not read this National Enquirer wantabe if you paid me. No doubt they are in the throws of gasping for their last breath. How’s that liberalism working out for ya?

  • Gene

    Liberal dopes will still buy it . LOL

  • I

    I loved the New York Times, and still do, but they have become a very stupid, knee-jerk leftist rag full of propagandistic nonsense. Too bad, but that’s what really sending this once-great newspaper into oblivion: simple irrelevance.

  • Andrew Welser

    “Granted, Today’s Times is better than a product of the penny press.”

    What?!?!?! Jeff, if you mean the Times is a better liberal rag than from days gone by, then by that standard you are correct.

    However the Times has been co-opted by the liberal press corps (or corpse as Obama affirms) and is not worth the cost to even print.

    The two reliable sources of news I go to is the Drudgereport and World Net Daily.

    I even dumped Fox News with the current crazy love fest for Romney (and they call Ron Paul a nut job). I think it started when Mitt started to grope their under shorts… geez people, get a room!!!

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    • Andrew Welser

      Yo no podría concordar con más.

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  • Pete Rooke

    Jeff, judging from comments here your readers appear to be semi-literate with a tenuous grasp on reality. Does this reflect badly on you?

    • http://www.buzzmachine.com Jeff Jarvis

      this topic happens to draw them. Was speaking with someone from the Times on this topic today and the same thing happens on other sites. Pity.

      • WestWatcher

        Not a problem. They’re american voters. They elect leaders democratically, without regard to race, color, creed, intelligence or ability.

        They don’t need no fancy learnin’,

      • Robert Levine

        Jeff, I’ll bet you $50 that the NY Times makes money from this price increase. Care to put some money where your mouth is?

        • http://www.buzzmachine.com Jeff Jarvis

          In the short term, they will. But what’s the long-term strategy? And I’m not arguing about the specifics of this move; I’m talking about the larger, changing economic models at work.

        • Robert levine

          I’m not sure if there is A new model but one new model thats working at some big ambitious papers is charging for news – see, FT, WSJ. One model that IS NOT working is ‘give it away and pray’ – what the Guardian is doing. If you are going to question the long term viability of a major paper, that’s the one to question. It looks like the worst is over for the NY Times.

        • http://www.buzzmachine.com Jeff Jarvis

          And that’s why they had to fire their CEO. Because her work was done and the paper was safely delivered to the Other Side. Sure.

  • http://Qwest James Painter

    They are just following the economic advise of their Nobel prize winning columnist Paul Krugman. Easily the best way to go right down the toilet whether it be a country or newspaper.

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  • http://wyman.us Bob Wyman

    Jeff, The price for a New York Times subscription is somewhat different than you describe if you consider that the online price is $19.95 (66 cents/day) and that you can now get a free Barnes and Noble Nook reader simply by subscribing to the Times… See:

    https://plus.google.com/u/0/113651533166317708938/posts/BcobXJ9DbPc

  • occupy_buzz_machine

    Did anyone hear “Jeff Jarvis” on Diane Rehm’s NPR show? What a rude, inconsiderate dolt. How did this guy become a professor at a Graduate School. Occupy protests started from a Print Magazine called Adbusters.
    Apparently, this guy reviewed Sitcoms on TV which makes him to be qualfied a Graduate School Professor? By claiming we have no right to unreasonable search and seizure, he seems to be a spokemouth for the New World Order. I’m going to go the record here and call Jarvis an enemy of the US Constitution. All of our Police State agencies are heavily involved in the You Toobs, Facebook and Twitter. This is the equivalent of a virtual soldier. Social Networks strip wealth, they don’t create it. They create virtual weatlh for Wall Street. Jeff you’re the bozo!

    • http://www.buzzmachine.com Jeff Jarvis

      Oh, my

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  • http://www.facebook.com/charlie.gilichibi Charlie Gilichibi

    Dear Readers, please consider supporting this crowdfunding campaign for a digital platform and business model for the sinking newspaper industry: http://www.indiegogo.com/seefeek. Sincerely thanking you from the bottom of my heart. Charlie Gilichibi