Five Cents for Daily Newspaper?

Five Cents for Daily Newspaper?
by Keach Hagey
http://www.villagevoice.com/nyclife/0714,hagey,76253, 15.html

After a long day of shopping at Gimbels, nothing beats an icy highball at McHale's, then heading home on the Ninth Avenue El with the newspaper you bought for a nickel.
Well, at least one of these things you can now do again. The New York Post recently began offering weekday subscriptions for the jaw-dropping price of $13 a year, or five cents a day.

"That's, like, free," marveled Post flak Jody Fisher, before respectfully declining to discuss the financial logic behind his client's offer.

Startled observers, rubbing their eyes to make sure they hadn't fallen into a tabloid time machine, were split on whether this proved the Post was crazy or evil.

"This is yet another example of a desperate company making a desperate move," said Marc Kramer, Daily News CEO and leader of the "crazy" camp. "The fundamentals of their business are interesting, because there are no fundamentals."

The Post finally overtook the News in circulation last fall—averaging 704,011 paid weekday copies to the News's 693,423—after a steady climb that began when the Post dropped its newsstand price to a quarter in 2000. (The News still trumps the Post on Sundays, 779,348 copies to 427,265.)

A few months before resigning in 2005, Post publisher Lachlan Murdoch acknowledged to BusinessWeek that halving the cover price widened the paper's annual loss, rumored to be in the tens of millions. In the same article, he said he intended to restore the paper's 50-cent cover price if and when the Post passed the Daily News in circulation, adding, "We very much care that it make money one day." But it seems pretty clear that "one day" will not come until the Post is straddling the bleeding, lifeless corpse of the undercut Daily News. (Current Post publisher Paul Carlucci did not return calls for comment.)

Thus the "evil" theory. Robert Broadwater, founder of the media mergers and acquisitions firm Broadwater & Associates, said there has long been suspicion in the industry that the Post is "willing to lose buckets of money to put the Daily News out of business."

While some see the Post's price as a throwback to Hearst and Pulitzer's 19th-century newspaper war, others see it as heralding the future of daily newspapers in the Internet-driven 21st century.

"It's a small step to giving it away," said Piet Bakker, who runs an Amsterdam-based blog, newspaperinnovation.com, which tracks free dailies. He compared the Post's strategy to that of several European papers, which have responded to today's hostile business climate by offering their papers free to part of their readership. "We will definitely see more models like this."

New York's own free dailies also expect
company. "There will be more people coming into this space," said Daniel Magnus, publisher of Metro New York. "The traditional newspaper model in the eyes of investors is done."