James Ledbetter, the editor of The Big Money site, wants to know why Wired magazine isn’t given away for free to its readers when that is the mantra of its editor, Chris Anderson.
“Cynics might argue — and Anderson himself suggests — that at $10 a year for 12 issues, a Wired subscription is already a loss-leader; the problem with that is that Wired owner Condé Nast is taking the loss without leading its readers to anything that generates sales. No, the reason that Wired still charges you lies in the somewhat magical economics of advertising.
“If Anderson’s thesis were correct, Condé Nast could presumably build the circulation of a free Wired magazine so high — it’s very good; I’m sure millions would read it — that they could then charge advertisers even more than they currently do and not only make up for lost circulation revenue but exceed it. This remains the hope of many Web publications (including this one) that give away all their content for free.
“But here’s the rub: Condé Nast doesn’t want those readers. It charges a very high price to advertisers — in Wired‘s case, about $90,000 a page, according to Publishers Information Bureau, though in reality much less. The only possible justification for such enormous sums is the notion that advertisers will reach a select —Condé Nast really likes the word prestigious — group of readers. Expand that reader pool too much, or in the wrong direction, and the prestige justification evaporates.”
Read more here.
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