Hearst Magazines is following a ‘contrarian strategy’ when it comes to its online strategy and pricing its print magazines according to an article in Monday’s New York Times. Hearst has raised newsstand prices for most of its magazines, sometimes significantly. And rather than sticking all of its content online it has been pretty coy. Online readers are told to go buy the print version for some of the juicier stuff Hearst has to offer. The NYTimes tells us that the result seems to be paying off since the price increases didn’t cut circulation significantly and given that Hearst’s ad pages only declined 6.7 last year compared to an industry average of 11.7 percent. I don’t know enough to say whether Hearst has followed the right strategy or whether it has found a secret to avoiding the free fall of the newspaper industry or the slow slide into oblivion of some of the news magazines. Their experimentation with new pricing models and ways of doing things is surely right though.

The magazine industry has been largely following the same old pricing and business models for the last century. In fact, it was a bit more than a century ago that the magazine industry was revolutionized. As I describe in Catalyst Code, the magazine industry in this country used to have high newsstand and subscription prices and little advertising. Magazines were almost like soft cover books. Then one of the key players slashed prices to beef up circulation and started selling advertising.

The online revolution is a cause for the magazine industry to reconsider its pricing model and just about everything else. As a physical medium, magazines still have a lot of advantages for consumers and advertisers over the web at least for now. Advertisers in particular benefit from the serendipity of consumers running across their ads as they navigate their way through the magazine and consumers have been less interested in abandoning slick glossy magazines than humdrum newspapers. In “catalyst” industries that depend on connecting multiple groups of customers—advertisers and readers in the case of magazines—it is possible that dramatic changes in the prices can lead to a new profitable equilibrium. Remember, that is exactly what happened at the end of the 19th century when subscription prices were slashed. It is possible that an innovator—and maybe it will be Hearst—will find the magic formula again. If Hearst succeeds, many in the magazine industry may owe them a huge debt of gratitude.