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Publishers Boost Revenue With $2 Newspapers

U.S. publishers are betting they can boost revenue by getting readers to fork over a few more quarters for their newspapers. New York Times Co.'s flagship newspaper will cost $2 at newsstands as of June 1, a 50-cent increase. A.H. Belo raised the Dallas Morning News 25 cents to $1 in February and will consider more increases next year. Price increases at the Washington Post and Tampa Tribune have paid off with higher overall circulation revenue.

As a result of previous price hikes, Times Co.'s circulation revenue rose 1% in the first quarter, and accounted for 38% of total sales, up from 31% in all of 2008. Even though Americans bought fewer newspapers, various other papers have posted rising circulation sales this year.

But experts advise caution. Raising prices too far may carry unintended consequences, including driving more readers to free news Web sites, says Tom Corbett, Morningstar analyst. "Especially in this environment of consumer retrenchment, if your readership is not well-heeled, highly-educated and very attracted to your unique content, there's going to be a ceiling to your ability to raise prices," he says.



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