Does Digital Really Save Cost

Reports lately have been coming in about newspapers shuttering their print editions and moving exclusively online to save cost, but how much money are these papers really saving? According to a new Folio report, a lot!

Paper, printing, and postage costs for delivering a print copy of a magazine average about $1 per unit. Delivering that same content digitally can easily result in a 75 percent cost saving&#151as low as 15 cents a unit, depending on the size of the issue, the number of pages, and supplier negotiations.

Last year b2b publisher EH Publishing launched a digital edition of CE Pro. The print edition had roughly 50,000 subscribers. To produce each print edition, the publisher had to shell out roughly $1 for each magazine, to publish online it costs the publisher roughly .15 cents per reader. Currently the number of digital-only subscribers is approaching 10 percent of the magazine’s readership.
“Digital saves more than $50,000 per year for CE Pro alone,” said Elizabeth Crews, circulation director.”That’s huge.” Huge meaning around $60,000 per year.
On average, costs of delivering a digital edition usually amounts to no more than $1,000 to $1,500 per issue&#151and can be sizably less depending on the publisher. It also requires no physical inventory. Customarily publishers see around 70 percent of their papers go unsold, which they then have to take back and destroy at cost.
The low cost of digital publication is also offset by the low cost of advertising revenue online though. “I don’t look at digital as an exercise in saving money on print,” said ITEM owner Graham Kilshaw. “I see it as a different product and as an exercise in high-margin publishing. If we can achieve a 35 percent margin on print, we can achieve a 60-70 percent margin on digital publications.”
No matter how publishers view their print or digital publications, the bottom line always is and always will be the money these publications generate. So far no business model has proved 100 percent effective.

Publish date: April 6, 2009 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT