Publishers Show Yet Again How To Make Money By Reducing The Price To Zero

from the once-you're-lucky,-twice-it's-a-business-model dept

One of the slogans of the copyright industries is that you can't make money from giving things away. Unfortunately for them, examples just keep coming up showing that's simply not true. Techdirt wrote about the interesting case of the London Evening Standard back in 2009, shortly after its new owner decided to turn it from a (loss-making) paid-for newspaper, into one that was given away. So, three years later, how did that work out?:

Andrew Mullins, the paper's managing director, says that in the year up to 30 September [2012], the Standard managed to return a profit of just over £1m [$1.5 million].

The transformation from loss into profit is remarkable when set against the background of the paper's enormous losses when it was a paid-for title.

At the time the paper went free, on 10 October 2009, the previous quarter's figures, if annualised, would have registered a loss of £30m [$45 million].

Confronted by this kind of result, the copyright maximalists will probably say: so what? One success proves nothing -- it can't be generalized. But it turns out that another London publication, the weekly listings magazine Time Out, has recently made a similar move, reducing its price to zero. Not surprisingly, that has allowed it to boost its circulation hugely:

According to figures from the Audit Bureau of Circulations, Time Out had an average weekly circulation of 305,530 in the final four months of 2012, over five and a half times its 54,875-strong circulation in the same period of 2011.

Of course, giving away more copies is easy; the hard part is making money by doing so:

Although Pepper declined to comment on profit targets for the free magazine he said the Time Out business "makes money" and he hopes it will stay in profit.

Pepper said: "Ad revenue has massively exceeded our expectations. We have seen very strong double-digit year-on-year growth. You can read as much as you like in to that but the print market is not having a strong time in general."

Given the tough economic climate, it's impressive that not one but two companies have turned around ailing publications by giving away copies of previously paid-for titles. Of course, the copyright industries will once more dismiss these as "only" being two examples. So the question has to be: just how many dramatic success stories like these does it take before that tired old cliché about the impossibility of making money by giving things away is taken out the back and finally put out of its misery?

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Filed Under: advertising, business models, economics, free
Companies: london evening standard