Goodbye, daily newspapers in Detroit

[classicman]

May 27 (Bloomberg) -- U.S. publishers are betting readers will fork over a few more quarters for their newspaper, one of the few ways they can boost revenue as advertisers cut spending.

New York Times Co.’s flagship newspaper will cost $2 at newsstands as of June 1, a 50-cent increase, and subscription prices also will rise. A.H. Belo Corp. said this month it will consider more increases next year after raising the Dallas Morning News 25 cents to $1 in February.

Price increases at the Washington Post and Tampa Tribune also paid off with higher circulation revenue, a rare area of improvement in an industry that posted declines in advertising and readership in the past year. Ad sales have dropped so low that publishers said they are willing to lose some readers to get more money out of the loyal ones.

“Those rate hikes will continue as long as they can keep pushing them through,” Alexia Quadrani, a JPMorgan Chase & Co. analyst in New York, said in an interview. “Circulation is relatively a positive story, but unfortunately it doesn’t do too much to offset the declining advertising.”

In 2007, readers paid 35 cents for the Washington Post, less than half the current newsstand price of 75 cents, and $1 for the New York Times or the Wall Street Journal, which now costs $2.

Raising prices too far may carry unintended consequences, including driving readers to free news Web sites, said Tom Corbett, a media analyst at Morningstar Inc. in Chicago. Most publications have suffered declining readership as consumers seek more news from the Internet or television.