Ah, but students aren't just poor -- they're a tricker state, one which I'd refer to as "probabilistically temporary poor." Consider that people who read Hacker News are probably intellectually curious and are probably more likely to be computer science majors. It's also pretty likely that these students are bright and will grab decent jobs after graduation. After having exprienced the quality of Hacker Monthly, they will probably wish to continue. While they would no longer get the student discount, they now longer need it since they have acquired decent jobs. Since digital distribution costs practically nothing, the only cost to the distributer is marginal, but with the benefit that the students will probably become paying members in the future.

Exactly this. I'll attempt to speak for my kin here, I'm currently a student and while interested in Hacker Monthly, I couldn't justify paying (subscribing?). I entered my details in the form and hopefully I am eligible. If the product is interesting and useful I would have no problems paying (either when I'm no longer a student or even before that). I'm sure there are others like me and this seems like a case of "get them hooked young and they will be customers for life".

Great explanation. The price discrimination of note here is third degree price discrimination. I think the most vivid example of this type that people here have seen is how Apple's product lineup is composed and the various pricing they offer to different types of customers.

Also, most startups that have incremental pricing on their products (eg: wufoo, heroku) do this as well.

http://en.wikipedia.org/wiki/Price_discrimination#Third_degr...