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Comment by bradfa | Hacker News Reader

Our Rochester, NY USA paper just raised rates 50% for subscribers and are backing that with an online version of the paper that looks exactly like the print version. I canceled my subscription.

I want local news. I want to pay a reasonable rate (was $12 / month for 5 day delivery, now $18 / month). I don't care for an online version that looks just like the printed paper. I would sign up for a reduced (like $6 / month) version delivered to my iPad (or similar) that just had the local stuff (no AP, stocks outside upstate NY, no national sports, etc) because I do care about what's going on locally. I get the national stuff for free online lots of places, I can't get the local stuff easily.

Buffett seems to agree with my take, it'll be interesting to see where Birkshire takes their papers wrt the internet.

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Just want to point out how insane is is that none of us would price even the most basic SaaS product at less than $30/month, but people balk at paying $18/month to have a professionally edited newspaper printed and DELIVERED TO THEIR DOOR.

Newspapers are so hosed.

Consumers don't buy SaaS products that cost more than $10 / month. Businesses regularly pay $30+ / month for things, it's way cheaper for them. But in the consumer land, cost is king 99% of the time.

Consumers buy Netflix for $9 / month, or Dropbox for $10 / month. Consumers don't buy $30 / month SaaS Internet services. Heck, the only "service" most consumers pay for that costs more than that is cable TV / high speed internet. They're entrenched with high prices, everyone accepts them. Newspapers have always been cheap, making them expensive now is not acceptable unless I'm really getting more of what I want.

SaaS products have support costs. Newspapers are media - they're produced, replicated a bunch of times, then consumed.

Ever received a letter to the editor? Legal threat from a story you published? Had someone get fired over a piece you wrote and had to deal with the guy's family having to sell their house. These are extreme examples, but newspapers have support costs, too.

As a reporter! These are all VERY real considerations, and very very VERY common. i wrote stories that contributed to a few local elected officials getting the boot. I've had people threaten legal action on my stories too. There are lots of things most people never see/think about concerning journalism. (edit: while there are some reporters who are assholes and who relish getting people fired, most decent ones agonize over whether they are reporting accurately and fairly. Such was the case with Woodward and Bernstein).

Also, the local news thing Buffett talks about is so true. Why would you run national news in a local paper people are buying when folks can get it free from CNN ? or a blog?

I think there's a healthy mix that hasn't really been found yet. The NYT has a decent model of 10 articles a month that seems to have been working well so far. I also really like the thing that that foreign company "Piano" is doing (I had a very similar idea. It's like cable subscriptions but for newspapers).

I'm not ready to say newspapers are dead yet, but they're mighty close, especially if they don't come up with a new business model. =\

Why do you think a version delivered to your iPad should be cheaper than the print version? Do you not receive the same value in both cases?

How could you possibly believe all of the efficiency gains from having a digital supply-chain wouldn't lead to a cheaper product?

Those gains are MORE than cancelled out by the miserable rates they are charging for digital ads versus print.

Thank about it: even if you read every page of the paper online every day for a month you wouldn't generate anywhere near $18 in revenue. Heck, you probably wouldn't generate that if you clicked on every ad.

It used to be that the cost of the paper roughly covered just the printing and distribution. All the money to actually pay reporters and editors and photographers came from the ads.

So here's a theory. An old adage used to be "I know half my advertising dollars are wasted, but I don't know which half!"

Now that you can get analytics on ad views and interactions, we do know that the interaction rates on ads in publications are terrible. Therefore, they command lower rates.

Is this a case where technology is "cleaning up" an ineffective use of marketing dollars?

Another change for advertisers is that they can get superior targeting online. Why broadcast to everyone when you can target your niche directly?

On a side note, I hate marketing. I want to either be the customer or the product, but never both. That said, I might pay extra for newspapers or media with no ads, only reporting. I want investigative journalists essentially on my payroll. Which is basically public broadcasting (NPR or PBS in the US), but I wouldn't be opposed to a completely private alternative. The issue there is that I'd want to pay an established name, an upstart would have to convince me that they'll provide excellent work.

For sure, that's part of it. But I think a bigger part is that the role newspapers play in society is changing and new media is filling roles that were once their exclusive domain.

Or, put another way, I think Craigslist obliterating the classified ad market has more to do with it than analytics suddenly enabling marketers to see their ad dollars were wasted at newspapers.

I might pay extra for newspapers or media with no ads

I probably would too, but that's a terrible deal for the advertiser: pay us money to broadcast your message to only the cheapest, least engaged segment of our audience.

To play the devil's advocate, a product that is cheaper to produce, doesn't necessarily sell for a lower price to consumers. The pricing could relate to consumer demand for the product, competitors' prices, etc., rather than being a simple function of the price of production. I'm not an economist, and I might be wrong.

I'm not an economist either, but what you say is - for what I understand - the consequence of the whole supply/demand concept. There is no global "value" of things, in the end the only real value is what people are willing to pay for it.

Because I value the product more than I value the distribution channel. If you can deliver me interesting, in-depth reporting, then I'll pay for it and I honestly don't care how you get it to me.

You consider the cost of printing and delivery to be much higher than it really is. You also ignore the elements of the newspaper that used to off-set various costs for you that are disappearing.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

This is such a critical thing to understand. No one understands the true cost, because no one has ever paid for the news, it's always been advertisers. And now, for whatever reasons, advertisers don't want to pay for the digital equivalent, and they don't seem to be coming around.

This correlates to brandnewlow's comment above as well. It would be fascinating to see a news source that was paid for entirely by customers and thus not beholden to advertisers--something like HBO. But it would very hard to sell such a thing, because $15-$30/month for news, historically speaking, seems insanely high.

Sounds basically like what Stratfor was trying to do. I don't know what they charged, or if the value was there, though.

I know i'm not really adding anything to this discussion by posting this, but I just want to say this thread here is an excellent analysis. If I could sum up the plight of newspapers in a few paragraphs, i would pick this and its few parent comments.

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