The point of making the subscription free primarily is to use the print edition as a marketing tool for the online product. A secondary effect is that you’ll have a larger circulation and can therefore charge more for your ads.

And for the record, I’m talking about newspapers, I would not recommend this model for magazines.

The price of an issue is a surprisingly poor metric for the efficacy of an ad inside the paper. To go with your example, there’s no guarantee that the couple hundred people paying $1000 an issue will pay attention to my ad even if they do read every issue.

If I buy an ad that goes out in 600,000 papers and the yield is 30%, that means I reached 180,000 people. If I advertise in a periodical with 300 subscribers and I get an unrealistic 100% yield, only 300 people see it. As an advertiser in print, scale is what I’m after, and 180,000 eyeballs are worth more than 300 except in certain highly targeted cases.

So while you’re right that there’s no guarantee that non-paying subscribers will read the paper cover to cover, I think it’s likely that a combination of extra subscribers and increased ad pages will have a net positive effect on print ad revenue, which is the secondary goal.

The primary goal is to advertise the web site. And this seems like a no-brainer to me. The more people who see your brand (you’re certainly aware that you’re receiving the paper, even if you’re not reading it), the better. Treat it like a direct mail campaign.

Companies send hundreds of thousands of unsolicited flyers through the mail all the time, because it actually works. The newspaper is in the unique position to use their OLD product (the print paper) to have a massively-scaled, almost completely subsidized, totally opt-in and ongoing direct mail ad campaign for their NEW product: the online news destination.

In summary:

So you’re absolutely right: the subscription count will be artificially inflated – that is the point. An artificially high subscription count means you’re intentionally trying to put your marketing materials (the print product) into the hands of as many people as possible.

So by making the subscription free you are encouraging non-readers to pick it up for the first time (at my doorstep for free every morning? why not?) while also getting to establish a relationship with them, an opportunity that is markedly absent in the news stand transaction.

If a reader is willing to pay $15 a month for a subscription, I’d guess there’s a pretty high likelihood that he or she is actually reading the paper (if not, why drop the money on a subscription?). But if a subscriber doesn’t have to pay a dime, it seems to me that there’d be a whole bunch of them who might never read past the front page. Advertisers may find the high circulation attractive, but how could they not question the value of those impressions?

(To make my point clearer, consider this ridiculous example: Suppose a magazine charges $1,000 per year for a subscription. Sure, the readership would be teeny, but any subscriber paying that much would be darn sure to read every issue. To an advertiser, each of those subscribers would be worth quite a bit, as it’s almost certain that he or she would actually see an ad.)

It seems to me like you’re trying to do too many things with the print edition. You want it to be a marketing tool for the online product and a metric for advertising prices? Let’s go back to what you said in your last comment:

“The pricing is meant to encourage the behavior you want, in this case, you want subscribers far more than you want random news stand purchases.”

Do you? I agree that if the primary goal is making advertising revenue from the print product, subscriptions are the way to go. But I understood the thrust of your original post to be that driving new traffic to your online product is the desired behavior. If that’s the case, and if the print product is intended to market the online newspaper, then encouraging non-readers to pick up the paper for the first time seems way more desirable to me.

“I have 600,000 subscribers” is a much better starting point when selling ads than “I print 600,000 copies.” The second statement begs the question: “how many of them are read?”

So what a newspaper wants is a huge subscriber base, because you can charge a higher premium on ads if you have subscribers who are engaged with your brand than you can for random pickups at news-stands.

You might be able to accomplish the same by having a $4/month subscription and a $0.25 news stand copy, but to really blow your subscription numbers to the stratosphere, you need to go free.

The idea is that the print edition will probably *cost you money,* but that it will be made up for by your web offerings.

The theory is not fully baked, of course, and I don’t have access to the real numbers from any newspaper, so you could be right.

I understand that subscriptions are usually cheaper per copy than newsstand sales, but that’s because subscriptions usually guarantee more revenue in the long-term than sporadic newsstand sales. Once that revenue equals zero, though, what’s the point of still charging at the newsstand? Why wouldn’t everyone just subscribe?

Why not offer reduced-rate subscriptions (paying for the convenience of having it delivered) and free newsstand copies? If it’s supposed to be a marketing instrument, doesn’t it make more sense to offer it to people walking through a public place who might not be as familiar with the product?