Crikey editor Misha Ketchell writes:
Want to add $12
million to the profit line of your media business with one relatively
painless decision? It’s easy if you’re Australia’s biggest-selling
daily newspaper – just raise your cover price by ten cents and you’ll
add more to your bottom line than the total profit of all but a handful
of newspapers in the country.
A postage stamp sized item in Melbourne’s Herald Sun
last week announced the paper was increasing its price from $1 to
$1.10, pointing out that it has been six years since a price hike and the
increase was due to “higher production costs”. That may be true, up to a
point, but what’s more likely going on here is the art of wringing more
profitability from a mature business in a market where the competition
is weak and there’s not much risk of losing many customers.
And what a profitable increase it is. According to the Herald Sun’s
latest figures, the paper is selling 554,000 copies on weekdays and
514,000 on Saturdays (Sunday is treated as a separate entity). With the
paper pocketing 7.5 cents out of every 10 cent increase – the rest goes
to the newsagent – the price increase translates into an extra $246,300
a week or $12,807,600 a year in profits.
It makes you wonder
whether the increase will be repeated across News Limited’s monopoly
markets in Brisbane, Adelaide, Hobart, the Gold Coast, Darwin, Cairns,
Townsville, Geelong etc. When we tracked down News Limited corporate
affairs director Janet Fife-Yeomans yesterday and asked if there were
more increases on the cards. she replied: “Not as far as I know at the
I think I can hear the numbers being tapped into the Holt Street calculators now.