While the 50 cents per edition that newspapers charged was not enough to cover their costs, it sent a signal to advertisers that they were getting a certain type of eyeball. An eyeball that had 50 disposable cents per day to buy packaged news in a local market. That 50 cents was an important signal. Newspapers would find other ways of getting those same eyeballs, by striking deals with hotels and airlines and essentially supplying papers at a deep discount, but making it up with the fees they could charge to advertisers based on their access to travelers, who have a lot more than 50 cents to spend. Some publications took it one step further: they covered business and their readers could put the subscription on their corporate cards as a business expense. Personally, it cost them nothing. This is the strategy of the WSJ, the FT, and what the NYT would like to be with DealBook, etc.
Also solved the issue of people walking off with a giant stack of newspapers and throwing them in a gutter, as occurred with some completely free papers.
Is that the 50c really signalling disposable income? Or just that it signalled that the newspapers were being read by humans and not just sitting in a pile somewhere?
To my intuition 50c per day doesn’t signal a useful amount of disposable income even in 2006 dollars.
I thought it was more to do with the type of person that read papers more than any price signal. If I were to generalize my experience with people reading papers it's that the poorest 20% of society never read them, the next 20% read the Sunday paper, the next 20% read it daily and the 20% after that read something like the economist. Through self selection advertisers could target their audiences somewhat. Of course those are extremely broad generalizations.
