Report: Subscription Discounts Drive Down Newsstand Sales
New MagNet study finds monthly magazines offer subscriptions for an average of 63 percent off cover price.
It's no secret that newsstand sales are, at best, a marginal revenue source for the vast majority of magazine publishers.
Those looking to maintain high ratebases by aggressively discounting subscription rates, however, may want to reconsider that strategy, according to a new study from MagNet.
In an effort to measure the correlation between newsstand declines and subscription discounts—or, more realistically, the degree to which such discounts are eating into newsstand sales—MagNet examined cover prices, subscription prices, and sales trends for 70 of the top 100 selling regular frequency magazines over a two-year period ending December, 2015. SIPs were not considered.
Not surprisingly, the study found a direct correlation between deep subscription discounts and lagging newsstand sales, as the less money consumers will save with a subscription, the more apt they are to purchase a frequency title one issue at a time. What is surprising, perhaps, is the extent to which this idea has manifested itself in the marketplace.
Titles that offer per-issue subscription discounts of less than 50 percent off the cover price saw, on average, newsstand declines of between 3 and 5 percent over the two-year period. Titles offering subscription discounts of 50 to 70 percent, however, experienced declines around 11 percent. Titles taking the aggressive stance of offering subscription discounts greater than 70 percent saw newsstand sales slip over 16 percent, on average.
Most monthly titles analyzed sit squarely in that 50-to-70 percent range; MagNet reports that the average subscription discount was 63 percent off, compared to just 27 percent off for quarterly titles. Accordingly, newsstand sales of those monthly titles dropped 15.2 percent over the two-year period ending December, 2015, while sales of quarterly titles fell 3.4 percent.
None of this likely comes as a surprise to publishers, many of whose print editions are driven primarily by advertising as opposed to single-copy or subscription sales. It raises questions, however, about what a magazine offering subscription rates for 70, 80, or even 90 percent off the cover price is still doing on the newsstand to begin with.
MagNet's own conclusion is kinder to retail.
"We ask publishers to take a step back and reconsider their aggressive ratebases, their deeply discounted subscription offerings, and to again refocus on the newsstand, which we believe is, or could again be, their most profitable circulation revenue source," reads the study.