Understanding Print Revenue Models
Circulation revenue and advertising revenue are the two main sources of revenue for newspapers and magazines. A third source is a syndication, however, it only accounts for a small amount of the total.
Circulation Revenue
It is the cover price at which readers buy a newspaper or a magazine. Circulation revenue for any newspaper can be calculated on the basis of its cover price. The cover price of a newspaper or magazine is much less than its production cost. Because of the low cover price, the circulation revenue hardly amounts to one-third of the total newspaper revenue.
Advertising Revenue
Advertisements form the biggest revenue head for any newspaper. They not only cover the production cost of the newspaper but also generate profits. The volume of advertising depends upon the readership of the newspaper or the magazine. A newspaper with a large readership attracts more advertising than a newspaper with a small readership base. This is because the newspaper with a large readership can carry the advertiser’s message to a comparatively larger audience. The composition of the readership also plays an important role in deciding advertisement revenues. Even if it has a small circulation base, a newspaper that is read by the elite and upmarket readers can charge high premium rates.
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