3 ms·

Also, pre-digital, incremental distribution costs weren't virtually 0.

• est31 5y ago
  Indeed you can serve html content quite cheaply from your server, where you had to create and deliver physical matter to the readers before. But when you get your newspaper ads to 10k households instead of 1k, doesn't that increase the value of those ads by a factor 10 to the advertiser? The only thing I could think of would be spam prevention (you don't want someone to order 100 examples of your newspaper), but there are also other ways to combat spam.
• bryanlarsen 5y ago
  Distribution costs were about 20% of their expenses. Cover & subscription revenue was also about 20%. Let's assume that other expenses are about 60% and profit about 20%. Let's assume that making the paper free would increase distribution by 10X. So gross revenue would be 800%. Subtract 200% for distribution, and 60% fixed expenses leaving profit of 540%/20% or a 27X increase in profit. Obviously it wasn't a 27X increase in profit to stop charging for the paper. Why not? Because a free reader wasn't worth the same as a paid reader -- a paid reader was worth about 100X a free reader. Most free newspapers weren't actually read, and paying readers are a much more valuable demographic to advertisers.
  • dvfjsdhgfv 5y ago
    > Distribution costs were about 20% of their expenses. It depends where. Where I live they were negotiated individually but in the range of 25-40%.