Do you ever wonder how publishers come up with the prices of their titles?
Setting the cover price of a magazine can be a delicate task – it needs to be high enough to generate strong revenue, often compensating for a fall in copy sales, but also affordable enough that it offers customers value for money and is competitive compared to similar titles.
Cover price rises are fairly common across all sectors, and industry figures do suggest that they can be an effective way to maintain or grow profit margins.
Frontline managing director Frank Straetmans attributed price increases to strong performances by the children’s, puzzles, news and current affairs, and home improvement sectors this year, with the first three in slight growth (between 0.5% and 0.95%) from an RSV perspective and the third sitting just below level year on year.
Increases seem to be more accepted by magazine customers than newspaper customers, but publishers do need to be careful not to price themselves too high.
I spoke to the general manager from RBA Collectables, James Franks, about the importance of cover prices in holding onto the loyalty of customers, and he talked me through some of the factors that go into establishing RRPs.
Partworks in particular often have a promotional price on the first one or two issues to encourage customers to try them. The regular price is then set based on comprehensive research, including testing of different price points.
Price testing is commonplace across the industry, with publishers constantly aiming to achieve the optimum price/value balance.
Retailers can help sell increases in cover prices by highlighting any investment made by publishers such as redesigns, free gifts and competitions.