There’s a very simple reason newspapers and periodicals have such a low cover price (usually a few dollars, always less than $5) and are still chock to the gills with advertising.

To charge the advertisers more.

The logic goes like this….

The more a reader pays – the more the actually care about what’s being published.

The more readers care about what’s being published (the price they pay) the more they publication can charge advertisers to reach those readers.

Now, there’s a maximum price where only 1 person pays and a minimum price where the broadest group of qualified (as defined by the advertisers) readers pays.

In the end, the cover price is how the advertisers know the publication is reaching the intended audience.

For example, contrast the types of advertisements within your city’s entertainment weekly to those say in Entertainment Weekly or The Economist or even the NYTimes.

This is the also why annual subscription prices are usually a small fraction of the annual cover price (the difference is the value of your delivery address to the advertisers).

Because so much demographic data can be extracted from IP Addresses – we drop much of the data gleaned from offline purchase decisions in every http request. So any price tag on an ad-filled publication is money a publisher can use to raise their ad rates.

So, what did you pay for? – A higher quality advertisement.