The two revenue sources for newspapers are advertising and cover price. As advertising declines editors hope there’s enough elasticity in the price to keep the cash coming in. Here’s Philip Stone on how that’s worked out for London’s most expensive paper, the Sunday Times, which has lost a 100,000 readers after hiking its price up to £2.

The Sunday Times debacle frankly caught most by surprise, none more than the marketing people at NI. The newspaper had been riding a wave of success all year until September’s fateful decision. Executives raised the price from £1.60 to £1.80 in February and there was nary a complaint. So why not try a good thing again just six months later with another 20p increase and become the first £2 UK newspaper?

But this time the reaction was swift. October’s circulation sank 2.32% and for the first time in seven years sank below 1.3 million. November was pretty steady, so the thinking was that maybe the worst had passed, but then came the shock December numbers with a 5.87% drop over November – down to 1,212,886, barely above the 1.2 million mark. Those falls took a positive year and turned it into one with an overall 7.64% drop.

News International is in the midst of a £600 million ($1.17 billion, €900 million) investment in new printing presses that will enable all of its UK nationals to print color on every page. So if there was money being left on the circulation table to help pay for that investment then NI wanted that money scooped up, fast. Now it has found it has gone to that particular well one time too often, and too soon.

Stone’s right on one level, but a 20p rise still brings in £240,000 a week in extra revenue. Losing 100,000 readers to get that extra money might be a sacrifice worth making, depends what you lose out in advertising. Sometimes it’s quality not quantity…

There’s lots more worth reading in Stone’s piece – including an excellent take on the value of bins versus hawkers selling free newspapers – and some advice for the Evening Standard:

Maybe it’s time for the Standard to stop relying so much on vendors sitting or standing quietly at their little tables outside Underground stations waiting for people to approach them, and instead they get a bit more proactive.