Sunday, February 19, 2006

How does Time make money?

Wherein despite the apparent deal I am skeptical due to the bizarreness of it

Time wants me to subscribe to their magazine. Here's what they're offering:
  • 56 weekly issues
  • Person of the Year special issues
  • All other special issues
  • Unlimited access to Time.com
  • Unlimited access to archives at timearchive.com


The cover price for 56 issues is $221.20 ($3.95 an issue). A subscription to just the archive is $49.95 or $2.50 an article. So how much does Time want to charge for approximately 60 magazines mailed to my house AND allow unlimited access to the online archive?

Fifty percent off the cover price is a good starting price for a subscription, so $110? Nope, too high. What about a 75% discount - $55, no, a buck an issue is still too high. Surely, it couldn't be as low as fifty cents? Lower still.

Tired of guessing? Time will offer all that for $14.95! Or about a quarter an issue. How can they do this and why would they want to? I can't imagine this is profitable so it looks like a desparate attempt to increase subscription numbers. Increase subscribers, then they increase ad rates, then give away more magazines for free?

Maybe a subscription to Time has always been this low and I'm overly skeptical. Though, ordering from their website, 56 issues is $29.95, so maybe not.

So all that's left is asking if Time is worth $15.

3 Comments:

Blogger XWL said...

Most magazines make far more from advertising than they do from purchase price, so they could almost give it away and make money, potentially (if they could charge high enough ad rates, which is doubtful).

Don't forget the multiple practically free copies dumped on Doctors and other professionals (they have to charge something, or else they can't count them as subscribers, but they offer ultra low rates like $15/year)

I bet they're trying to boost the appearance of subscribers to justify continued high ad rates.

As far as taking them up on the offer, I'd be inclined to say they are still charging too much (really they should pay you $15/year for the privilege of counting you as a subscriber, not the other way around).

But the archive could be worthwhile if there are any research projects you had an inkling of doing (cause who doesn't love to do research in there spare time).

2/19/2006 04:47:00 PM  
Blogger Pooh said...

What XWL said.

I'd add that there is probably also some value to Time in being able to add you to a 'direct mail' list, as well as an email address. Not all advertising is contained within the magazine.

This kind of behavior is hardly limited to magazines, btw. The quickest example that comes to mind is that of video game consoles (XBox, PS2, etc...) - they sell the box at close to breakeven or perhaps even a slight loss, but make it up on games (or exorbitant licensing fees from 3rd party software developers).

2/19/2006 05:16:00 PM  
Blogger reader_iam said...

I did this a couple of years back and then let it lapse at the end of the subscription year (some time last year).

I haven't regretted it for a second. Put it toward a subscription somewhere else, I'd say.

2/19/2006 07:53:00 PM  

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