Charge what you're worth - subscription prices - Brief Article

Folio: The Magazine for Magazine Management, March 1, 1994

Consumer magazines may be having difficulty raising subscription prices, but certain types of trade magazines--high-frequency, time-sensitive publications--shouldn't have any problems, according to Gerald Hobbs, president and CEO of the recently sold BPI Communications. Hobbs feels confident that his 17 magazines--most of which are weeklies--will be able to hike subscription prices substantially.

"Relying on advertising to bring in 70 percent of your revenue is a very dangerous place to be today," he told attendees at a FOLIO: roundtable. At BPI, where advertising contributes 52 percent of revenue and circulation 23 percent, Hobbs expects circulation's contribution to grow if advertising remains stagnant. Circulation profit margins are already high: 54 percent before the cost of production is subtracted. Many would consider BPI's magazines expensive now. A subscription to Billboard is $239; The Hollywood Reporter, $155; Amusement Business, $105. But Hobbs expects sub prices to hit $500 in the next few years. "We spend a lot on editorial, so we need to charge a lot," he says. Rance Crain, president of Crain Communications, whose flagship publication, Advertising Age, costs $86 a year, believes trade publishers have "an inferiority complex." "We've got to recognize and be proud of what we are," he says, "and we can't be afraid to charge what we're worth, both to readers and advertisers. Can you imagine a person in any industry worth his or her salt who doesn't read the trade paper in that business? Anybody who doesn't is going nowhere."