Wednesday, February 4, 2009

If it Costs $10 To Produce A Sunday Paper And Your Highest Subscription Charge is $4, How To Make up that Missing $6 Plus Profit In Today’s Economy?

Philip M. Stone writes:

Elementary economics taught us if you are selling something for less than its cost of production and delivery, then you lose money, so when the San Francisco Chronicle says it costs $10 to produce its Sunday paper and its highest subscription charge is $4 then something is missing – like profit!

Now in the good old days when the economy was growing and in the days before Craigslist decimated the Chronicle’s classified advertising the elementary economics probably said that missing profit would be made up by selling lots and lots of advertising – display and classified. But again, that was the economic model for the good old days. And we are no longer in the good old days.

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