"The [crux of] the matter is that people now have a large selection [from which to choose], but prices for newspapers and magazines are too high, and [people] need a lot of money in order to subscribe to everything, to which they formerly used to subscribe."
Note carefully that in the original Russian , the "что" in "всё, что" is STRESSED (so it's pronounced shto, not shtuh, if you read the sentence out loud!).
And it's stressed because it's not functioning as the conjunction "that" (as in "He said that he would be there"); it's functioning as an interrogative pronoun, and can be translated as "what" or "which". Thus, "...всё, что..." can be translated as "everything which" or "all of the stuff." (Compare Что блестит -- не всё то золото, "[That] which glistens -- not all [of] that [is] gold.")
Taking your questions in order:
1. раньше in THIS context means "in the past; in former times; in the good old days" (as opposed to "a few hours ago" or "sooner than other people", which can be used to translate раньше in other contexts)
2. People in general formerly subscribed to lots of newspapers/magazines, back in the good old days when they cost less.
3. People in general, the Petrovs among them