Question

Most magazines offer enormous subscription deals for college students. For example, Time magazine offers a one-year subscription for $29.95, when the cover price is $3.95 per issues. This is an 85 percent discount.

1. Why do magazines offer special deals to students?
2. How would your answer change if you are told that most subscribers get enormous discounts and that Time's subscription revenues does not cover its costs?
3. What is a likely reason why magazines sell their subscriptions so cheaply?

Answer 1

A. Magazines offer discounts to students because most students will soon be an earning member of the society and if they become a regular of the magazine, they will pay full price soon enough- post starting earning. Students are also highly social and many are liable to influence other to join too.

B. Then while the first reason of part A is not valid, second is still valid. Also, many magazines also have advertisement revenue. While their subscription charges do not cover the costs, the advertisements revenue will go higher with higher subscriptions and hence it may make sense to give discounts to many people.

C. The reason, as described in part B, is to increase circulation/readers, so that they can charge higher advertisement revenues.