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Tuesday, February 3, 2009

S.F. Chronicle Charges More for Redesigned Paper, Expects to Lose Readers

Posted By on Tue, Feb 3, 2009 at 12:52 PM


In Sunday's inaugural edition of the new-look Chronicle, editor Ward Bushee wrote a puzzling note to readers that amounted to telling a joke with a long-winded setup and then never delivering the punchline. In the piece, Bushee acknowledged that the daily "is losing large sums of money each week and has been for some time," that the economy sucks and it now costs a whopping $10 to produce and deliver each copy of the Sunday paper.

After this buildup, readers no doubt were waiting to hear that the Chron was raising its prices to cope with these harsh economic realities. But Bushee never went there.

So since Ward couldn't pull the trigger, let me finish the job: Chronicle readers, the paper is raising its prices -- especially for subscribers, who will now be paying a substantial premium for home delivery.

The Chron recently raised the newsstand price of its Sunday paper 50 cents to $2, and in mid-January the paper quietly raised its subscription price by 33 percent, from an annual rate of $300 a year to $400 a year for 7-day delivery. (That's about $60 more than if you bought the paper at 7-Eleven every day.)

The subject of charging readers more money came up at a Chron staff meeting two weeks ago when management showed off a prototype of the redesigned paper. When asked at the meeting how price increases would affect readership, Bushee predicted "double digit" declines in circulation, according to three people in attendance. (This would be on top of the 7 percent drop in circulation the Chron suffered last year.)

The price hikes are part of a plan to make the Chronicle, which has reportedly been losing $1 million a week for years, profitable. As Bushee said in his Sunday note (and on KQED's Forum in December), in the good ol' days newspapers could charge artificially low newsstand and delivery prices because advertising revenues more than made up the difference. That's no longer the case in the age of the Internet, so newspapers like the Chron need to increasingly rely on readers to pay their fair share.

I suspect there will be more price increases in the near future. The Chron's fancy new printing press goes operational in June, so that would be a logical time to hike prices again.

I actually think that the Chron is absolutely right to charge more money for its printed product; I just think that the timing is awful. If these guys were reading their own newspaper they'd realize we're in the midst of the worst recession in a generation and people are not spending money like they used to.

Bushee and Chron execs like to say that if consumers are willing to spend $2 on a cup of coffee these days, they should be willing to pay more for a newspaper containing vital information. The problem with that analogy is that, unlike coffee, reading a newspaper doesn't make you more productive at work, and, more to the point, you can't get coffee for free on the Internet. You can, however, read the Chronicle for free online, which is what many readers probably will do instead of paying more for the printed version of the paper.

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Will Harper


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