And now the big question: Will we see the “penny press” again? Beginning in the 1830s, some newspapers were hawked for a penny. In the 1830s and 1840s, there were three penny-press papers in New York City alone. Now that newspapers can sell a paper for one penny and count it as paid circulation, are prices going to plunge? It’s more likely they will go up. In the past, papers always figured that they got their revenue from ads, not circulation. So circulation per se was often unprofitable. But now that the ads are not coming in, papers have to get revenue from circulation.
According to the Columbia Journalism Review, the New York Times, which recently raised prices even as circulation dropped, will soon reach the point at which circulation revenues will pass ad revenues.
Says Riley, “More and more papers will be raising prices. There is no doubt about it. Advertisers are struggling, and they have been subsidizing the cost of circulation. Now circulation departments have to generate more revenue.”