ConcertinaChap wrote:That sort of implies that you make more money from a site user via ad impressions/click through than you do from an online subscription. Is that right or am I reading too much into that paragraph?
Not really. It's a blurred area to quantify.
The opening topic was really about allowing those readers with Print subs to also get a 'bonus free' Web sub. As Paul explained, in the early days of web sites, to help establish the SOS site we did effectively give away a free 'eSub' (as it used to be called) with Print subs, as well as selling them on their own. Web subs are VAT-able digital items and prior to the EU screwing with things and changing the rules, we paid a small proportion of the retail price of the eSub to the UK's VAT authorities.
Then the EU changed the rules and whereas previously any 'eSub' or 'Print+free eSub' sale made to a UK/EU customer included UK VAT at the prevailing rate (initially 17.5%, then 20%), with very little notice we (and lots of other sellers of digital goods) had to charge the VAT element based on what country the subscriber hailed from. All at differing rates!
At the time we were faced with having to negotiate with the VAT authorities in 27 EU countries as to how much VAT they wanted to charge us on our so-called 'free eSub'.
We were not charging subscribers any more money back then for the 'eSub' when bundled with the Print subscription, and the thought of having to lose 27 slices of VAT on every sub... well, you can hopefully understand why we took the decision to remove
the free element from that subs offer.
The only subscribers who continued to get their free eSub (duly renamed Web Sub) were those who had bought 2-year subs prior to the EU VAT rule changes.
There's no VAT (currently) on printed magazines in the UK.
So, this explains the policy shift and why we cannot just give a so-called 'free' Web Sub to every Print magazine subscriber -- the EU would still want their VAT slices, if we did, and we'd have to cut into the already small margin we make on sold Print subs to pay the EU. That way madness lies...
Returning to the ad impressions -- we only have a limited number of web 'slots' on the site and we deliberately limit the number of different advertisers showing in specific slots. Sometimes, advertisers pay extra for greater exclusivity so that their ad is served more times than other companies' ads designated to that slot.
Lots of our advertisers like to buy a 'magazine+website' ad package, so it's difficult to know the true costs. We certainly make more 'profit' per item from paid-for Web subs and Tablet subs compared to the Print sub, because there is a lower production charge associated with digital content. But again, it's not so clean cut since the majority of the content we put online is written initially for the print magazine and thus 'paid for' (staff and office overheads, printing, mailing, etc) primarily by a mixture of the paper advertising, print mag subscriptions, newsstand cover sales from newsagent/bookstore retail sales around the globe, etc.
Hope this has answered some of your question?