Review of Industrial Organization
12: 555–577, 1997.
1997 Kluwer Academic Publishers. Printed in the Netherlands.
Magazine Subscription Discounts in Australia
DAVID K. ROUND and TERESITA G. BENTICK
Department of Economics, University of Adelaide, Adelaide SA 5005, Australia
Abstract. The Australian magazine publishing industry is an extremely rivalrous oligopoly, with
publishers competing through the constant introduction of new titles, give-aways, editorial content,
paper quality, and the use of color, although price competition in the form of direct cutting of
cover prices is rare. Magazine cover prices are well-known internationally for their “stickiness”,
but subscription sales frequently offer readers a substantial saving over the cover price. This paper
investigates the inﬂuences of several supply and demand factors on subscription rates, and concludes
cover price, circulation and size of the publisher.
Magazines come in all shapes, sizes, formats, qualities and editorial matter. They
cater to a most diverse set of buyers; from biking to beer, from golﬁng to goldﬁsh,
from sex to sewing, and many more in between, there are magazines to cater for
any interest. Magazines are bought on impulse, or to ﬁll in time when the reader
is captive (like ﬂying), or as a regular, conscious decision to read a particular title.
They are widely available from newsagencies,
supermarkets, gas stations and other
retail outlets, as well as direct from publishers. General interest titles like women’s
magazines and business magazines are usuallypublished weekly. Other mainstream
titles, such as sporting, cars, entertainment, and home and gardening magazines,
are published monthly or quarterly. Specialist titles may publish quarterly, or half-
yearly. The magazine publishing industry is intensely rivalrous, comprising both
large and small one-title publishers. New titles constantly appear as publishers seek
a ﬁrst mover advantage in new market niches. While competition in terms of lower
We are grateful to the Department of Economics at the University of Adelaide for a Summer
Research Grant, to Maxine Koster for her invaluable research assistance in producing the data, and
to John Siegfried for his helpful comments on an earlier draft of this paper. We thank the executives
of the various magazine distribution companies for providing us with copies of their magazines, and
to the publishers who provided other forms of data and information. Two referees provided many
helpful comments and observations, of a quantity and quality not often encountered. Unfortunately,
some of their suggestions could not be acted upon, due either to the limitations of the data set or
the unwillingness of publishers to bare their souls to us. Any errors of economics or fact are the
responsibility of the two authors.
Newsagencies are specialty retail outlets selling newspapers, magazines, books, stationery,
greeting cards and so on. They are the major retail suppliers of newspapers and magazines in