• by Frank Saxe , November 8, 2002

The quest for new readers is a decades-old mission for publishers of newspapers and magazines. But in the current economic climate, balancing the subscriber half of the revenue equation is increasingly important.

“In an advertising recession, it’s important that newspapers make use of both revenue levers,” said New York Times chairman and publisher Arthur Sulzberger Jr. at the Audit Bureau of Circulation’s (ABC) annual conference in New York this week.

“We want subscribers to pay more,” agreed Hearst Magazines president Cathleen Black.

Their positions were certainly not controversial; it is what publishers have been trying to do for years. But many say recent ABC rule changes have made it easier for companies to explore ways to get subscribers to pay more.

After issuing a call to ABC to make wholesale changes to its circulation guidelines during the ABC conference three years ago, Don Logan, chairman of media and communications at AOL Time Warner, said some of the most “outmoded and inefficient” rules have been done away with. The result, he said, is “more transparent, more accurate, and more useful tools” to both publishers and advertisers.

The timing was critical, since the current economic climate has forced companies to get a lot more creative to put their pitch before consumers. Just ten years ago, sweepstakes led to 80 million sold subscriptions. Today, what is left of that promotional tool gives magazines just 7 million new readers. “We must work with other marketers to sell magazines,” said Logan. That is something Time Inc. titles are now examining, to tap into the 35 million AOL users worldwide.

Even Hearst, without the Internet presence of America Online, has been able to tap the Internet. Black said that website visitors have become the third largest source of sold subscriptions for Hearst. “That is a huge and profitable breakthrough,” she told the crowd. The challenge, however, is finding a way to sell those subscriptions for a non-discounted rate.

The web has also become an important source of subscriptions for the New York Times. Sulzberger said it is second only to telemarketing. “The old days of cold calls are dead,” he added, pointing out that such marketing efforts can be expensive, have high churn rates, and only serve to annoy readers.

A nationally marketed newspaper, the New York Times has seen its circulation rise at the same time it has raised its price. “There is incredible pricing flexibility we have discovered,” said Sulzberger. “We’ve been surprised and delighted as we brought the Times up to its appropriate level of cost, that our readers stayed with us.” They are also looking at ways to make money from the paper’s highly-rated website. The Times is looking at charging surfers for specially web-only content, and its has already sold 3,600 subscribers to an electronic edition of the paper that features all the stories, ads and graphics that are in the print edition. Sulzberger noted that 15% of those subscribers were from the New York metro.

Even so, the Times has seen its penetration in the New York City metropolitan area shrink in recent years. “It’s a huge concern,” admitted Sulzberger. He said they hope to follow other dailies in reaching out to new audiences, particularly by selling more subscriptions in the minority and immigrant communities.