Customer Loyalty Factor into Price Increases | FTI Consulting

How Does Customer Loyalty Factor into Price Increases?

Circulation Price Increases vs. Circulation Volume Decreases

Telecom, Media & Technology (TMT) | Corporate Finance & Restructuring

January 22, 2018

customer loyalty

Background

Though much has been made of the considerable increases in digital circulation at some of the industry’s most prominent news organizations (NYT, TWP, WSJ, etc.), newspaper circulation overall continued its decline in 2016 – falling just under 10% according to the Pew Research center.1

Print advertising revenues likewise continued, and too often accelerated, their declines in late 2016. In 2017 print revenues declined 15% according to the latest MAGNA Intelligence report (MAGNA Sept 2017).2 Though the declines will be offset somewhat by digital increases, total print advertising revenues will still be down 9%.

Consumer Revenue vs. Advertising Rates

Throughout this now decade long decline in newspaper circulation and ad revenues, one lever publishers have continued to use to offset revenue declines is increasing subscriber yield. Striking the right balance between raising subscription rates and the near certainty of losing more of an evershrinking print consumer base represents the enterprise risk to be considered and modeled.

Sources:
1PEW Research Newspaper Fact Sheet 2017: http://www.pewresearch.org/fact-tank/2017/06/01/circulation-and-revenue-fall-for-newspaper-industry
2MAGNA Sept 2017

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