Yikes. Probably $10k worth of code, and $39,990,000 worth of strategizing, consulting, Powerpoint presentations, and general hand-wringing about the "death of the news industry".
All I know is, if I'd spent $40mil on a paywall, I'd be damn sure it was written to filter on the server-side, not with a client-blockable overlay like they have supposedly implemented.
There are plenty of reasons why a client-blockable overlay could lead to more profit than more foolproof implementations. Some of that strategizing was probably worthwhile.
Criticizing is easy, but while I have my concerns with the details of the Times' decisions, I'd bet that after a few tweaks, their paywall will be seen as a success in three years.
I would certainly love to slag on excessively top-heavy project management and the New York Times, but I think you're being a little unfair here. Many of those "What do we build?" discussions are critical and non-obvious.
To just look at one little piece, this decision has massive SEO implications. I have some notion of what people qualified to comment on them cost. I'm not nearly the caliber of firm the NYT would stake their future livelihood on by engaging for this kind of work, but even absent that, the minimum possible scope for that SEO engagement blows $10k out of the water.
Indeed, however even with SEO consultants brought in, and even a Snake Oil Consultant or two, the $40 million pricetag is insane. Obviously $10k is no where near realistic when it comes to all the planning between however many stakeholders there are in the site, as well as figuring out ads management and what not.
Realistically, we would all still be shocked if they had paid $2 million total.
Considering how important this is to the future of the NYT 10 million would have been completely reasonable. Don't forget sometimes a 1% better solution can really be worth 100 million.
I'm not denying that regardless there will be a hefty price point on accomplishing something like this in a major organization such as NYT - but there are still limits on how much seems fiscally responsible. Even at $10 million being a possible reasonable number, it's still a fraction of the $40 million spent.
It's only reasonable if that $10M actually buys you something more valuable than what you get for $2M, even by 1% as you state. I think many of us are questioning whether that could possibly be the case.
I'm genuinely interested in hearing some ideas of what $8M of extra investment could buy in this case?
OK, answer me this: who in the organization has the technical know-how to decide how to solve all the SEO and usability issues; and the authority to do so?
If there's nobody even close, then they will have massive spec churn.
Actually the NYT has a pretty sweet tech lab with a crew of guys very knowledgeable about this kind of stuff. Some of the stuff I saw in there was years ahead what I've seen elsewhere.
Of course, actually getting buy in from the organization as a whole is the hard part. Technology is always the easy piece.
Again, I am not disagreeing - there are certainly tons of things that can factor a major price increase - whether it's outside consultants, tons of meetings to iron out office politics, getting input from all stakeholders, etc.
But at a $40 million price tag, someone somewhere is either dropping the ball, or someone is taking serious advantage with billing far more than reasonable for their services.
> I'm not nearly the caliber of firm the NYT would stake their future livelihood on by engaging for this kind of work
Aside from working on your own, are there any other real differences? I mean, I know that while being a decent C programmer, I wouldn't hesitate to point at people that are way better than I am, because they can produce more, better code, quicker. How's that work in the honest portion of the "SEO" world?
In SEO you can be good at programming, design, writing, marketing, statistics, "consensus building", arcane knowledge, connections etc. Best to hire a company that has all of that. If you can. Plus, orgs with that much money and prestige like to pay for someone with a top tier portfolio, probably one of the "thought leaders" in the industry.
There are all sorts of corporate SEO issues that just "appear" out of nowhere if a person doesn't consider it in advance.
A few examples from our site upgrade to drupal 7...
- comments permalinks were generating new identical pages under different URLs
- paginated pages were getting indexed by category, by author, by month, and sitewide ... creating tons of duplicate content issues
- the rel=canonical set up wasn't set up correctly either
- some of the modules for things like related posts & page titles needed redone
And that is just 1 small blog, whereas when you view the NYT it is likely spread across multiple submdomains, multiple CMS tools, and they likely have different directly competing business objectives for different sections. They also have a variety of inbound and outbound syndication partnerships which likely add yet more layers of complexity & yet more competing business objectives.
Upgrading our site cost 10's of thousands, and that was while valuing my time at nothing. If my time was valued at market rate it likely could have been into 6 figures...and all this was doing was upgrading a few platforms to newer versions, changing the site design, and adding a new payment system. Add in the layers of complexity and bureaucracy you would see at a big slow moving corporation (and tons of money into conducting tests and research) and I am not surprised it was in the 10's of millions.
I know one of our clients had a million Dollar CMS that they ended up having to scrap because of major issues with it...am not surprised that integration of a semi-porous paywall at the NYT would be pretty expensive.
I am willing to bet good money the problem NYT faces is the same problem that www.expertsexchange.com faces (opse forgot a dash), google won't index them if you get a paywal when you are a user vs a bot. So probably the reason for the CSS hack. It was probably research and stuff. Basically you'd have a paywall but nobody will be able to get to it because the news won't come up on google news, google search etc.
However why the price tag was not a maximum of $1,000,000 beats me. Possibly massive user and seo testing. Maybe a chunk was bribes?
I was on NPR today talking about this [1], and while I was the least insightful guest, I think that a lot of it boils down to still thinking like a business with 35% margins and huge headcount, rather than a scrappy underdog (that for some reason has a huge paper-distribution network in the Metro NY area tacked on).
I make software. We use an AGILE development process at our firm.
In determining cost there are 3 determinants: Scope/$$$/Time. Typically, a client can control one. When you think of the name (NYT), the image and brand, and aspiration they have to be the most read english news source, 40M on a paywall, seems fair. But what seems strange is the 14 months of work that they took, to create something thats inferior.
The fact of the matter is that the news industry model is ripe for a Tipping Point (@MalcolmGladwell).
It wasn't prudent for the NYT to make a dollar amount public. It only puts a target on their head.
It's a little more complicated than that. From the Bloomberg article:
"Developing the technology for paywalls is challenging because publishers are trying to strike the most profitable balance between charging some online readers and letting others in free to generate advertising and attention. Though Times Co. has said it will charge visitors after they’ve read a certain number of stories, for example, the company plans to let people coming to the website from social networks such as Facebook Inc. view an unlimited number of those stories for free."
I suspect that almost all of that budget went into market research. This isn't quite an A/B testing scenario. If you drive away potentially paying customers 50% of the time (in a worst case A/B test) then you are losing money. The potential for lost revenue in a "release early, release often" iteration approach may justify such a big budget. With so many factors, quite a bit of strategizing and research need to happen before putting things to the test.
Indeed, a bunch of New York executive wages over an 18 month period start to add up. Khoi Vin (former art director) pondered this on his blog a few weeks ago [1], citing it as one of the reasons he resigned his post.
This is not what was actually implemented, and would have finished the Times, due to SEO effects alone. (There are numerous other issues, but that's the one that will crater their revenue tomorrow.)
Seriously, while I appreciate the desire of programmers to think that we're smarter than the average bear, this is like saying StackOverflow is a clone-it-in-a-weekend site. It betrays a fundamental lack of understanding as to what is actually going on with the business model.
You obviously didn't get the sarcasm. Having said that, $40m is a lot of money, especially considering it shouldn't have required any extra hardware or even a complete platform change (with expensive licensing).
Even at $200k/year that's 100 developers for 2 years to implement what is essentially a subscription-based service. Even if you take into account the requirement to offer some level of free access for search engines and the like it still doesn't account for why this project cost this much money.
I believe they might have used the same stuff the Washington Post used[1]. The post quoted a lower ( 7 million ) but still unreal figure in another paywall related article [2].
Past experience at an old media company (who would have loved to have had a spare £40 million to spend delaying project launches) suggests the redundancies were people too busy doing productive work to produce job-saving Powerpoint presentations on how they were enhancing stakeholder value by synergising workflow processes.
At least he didn't change "bridegroom" to "bridegoom" so it was spelled the way it was pronounced. Apparently the pronunciation has changed back again.
Imagine if they'd instead invested that money in restructuring themselves for a viable, 21st century business model. I mean, it's a big ship to turn and you probably need a lot more than $40m.
But at least they'd be closer to cracking it than they are now.
Your assertion is based on faith, not facts. You believe that there's some mythical "21st century" business model that will save journalism with no evidence to back that up. If asking readers to pay for news doesn't qualify as sufficiently modern, I'm really not sure what you have in mind. Please elaborate.
(Personally, I think donations sought by non-profits are a better way to fund journalism, but that is decidedly pre-21st century.)
Saving journalism and saving The New York Times Company are two very different things. I'm focused on the latter in the above comment. The fact that businesses exist and make money producing digital content after 1999 is effective proof that survival is possible.
We're in a transition phase. Doubtless, buggy whip manufacturers survived a few years past the introduction of the Ford Model T as well. Whether that's an apt comparison for producers of information goods is too early to say - I don't think it's likely to be accurate, but I don't know what the future holds either, and I think things are still changing.
Thing is, there are still buggy whip manufacturers that have been in business since then. I don't know if Jedediah's Buggy Whips could have planned to survive the automobile, but they have. The New York Times I'm sure would like to be the buggy whip of journalism.
The Gray Lady is casting about wildly (probably before it really matters) in hopes of avoiding an uncertainty on par with the 1908 whip market.
> The New York Times I'm sure would like to be the buggy whip of journalism.
No, they don't. The few that are around are in an extremely niche business that most of the world does not need or care about. They're for hobbyists.
It'd be interesting to know if the buggy whip manufacturers from 100 years ago actually survived (I sort of doubt it, but don't know) or were recreated/re-formed to serve the niche/hobbyist market, which I think would require a different sort of business and mentality.
Interesting. Maybe a small number of them managed to change with the times (my guess is they didn't call it "pivoting"), but I still can't seriously think that the NYT wants to be the equivalent of "Jedediah's Buggy Whips". Right now they're more like Ford (well maybe not that big, but they are at the very least national in their reach and relevance), and I don't think they'd like to take the step down in size and importance.
You're treating all digital content as interchangeable. The New York Times is inherently more expensive to put together than Gawker. Gawker's business model produces enough revenue to turn a profit, but there's no guarantee that the same would hold for the New York Times. There is no such proof that an outfit that puts out the type and quality of journalism that the Times does can be sustained on online advertising dollars.
> You believe that there's some mythical "21st century" business model that will save journalism with no evidence to back that up.
There are plenty of free (paper) newspapers that are funded by advertising revenue. I don't see any reason in principle why it couldn't work for the online newspapers, who have lower overheads.
> I think donations sought by non-profits are a better way to fund journalism
You may well be right.
> that is decidedly pre-21st century
Except that it may well be easier to raise funds now with the internet. (Especially if/when we get a decent micropayment system.)
There are plenty of free (paper) newspapers that are funded by advertising revenue
I read one of those (Metro) on my commute to work every day, and it is, to put it mildly, very very bad. The reason they can be funded purely by advertising is because they seem to spend pretty close to zero on any sort of actual journalism.
So, let's say a wildly over-staffed (for this kind of project) team of 10 programmers for a year, on an average salary of $120K. That's still only 1.2M. Let's say another 800K on hardware. Does that mean the other 38M went to corporate, management, kickbacks to ensure that the right company got the contract?
If that's the case, it's even more depressing if the vast majority of the money didn't even go to people who had absolutely nothing to do with the actual implementation.
Can the shareholders of the NYT demand an investigation into this? Seems like this kind of ridiculous overspending should be something that would concern them.
You are very wrong about the size of the team that was involved. My guess would be
1) 10 to 20 developers
2) 2 to 3 sys admins
3) 10 to 30 managers
4) 15 to 20 executives, from low level, all the way to the top.
5) Outside consulting design team that billed them at $500/hour.
Q: How did they get so spend that money?
A: Endless meetings.
Executive salaries add up very very quickly. Executives and managers absolutely loooove meetings, that's how they can pretend to do anything useful.
In reality they spend hours discussing the color and the thickness of the line under the logo and bullshit each other, while developers are half-asleep from boredom or are wondering - "WTF, did this dude just discover the internet? and why is he in charge?"
UX specialists and UI architects/designers discuss things like thickness of lines. Also don't discount the sheer size of their website, making "simple" changes a whole different thing than on a private small website. You also forget testers, project managers, and lawyers etc. Blaming execs and managers is just too simple I think. That would be easy to fix.
> UX specialists and UI architects/designers discuss things like thickness of lines
You wish.
I'm yet to see a company where (often clueless) executives don't override decisions of professionals.
I know a huge company where the CEO spent five weeks changing the curve of one of the letters in the logo, there were something like 25 iterations. Want to calculate how much that cost?
You are assuming that positive value is generated when the CEO does things that are his job. Now, when a good CEO does his or her job, that is probably a good assumption. But a CEO who is willing to spend that much time on graphic design is not a good CEO. If he was that incompetent when it came to everything else, most likely the company was better off having him tied up on a project where he couldn't do that much damage.
Upvoted - I agree on the first part. As for his incompetence, the worst thing that a company can do is "promote" someone to a position where one "can't do much damage". It's damaging for morale of employees who are competent and hard working, but not properly rewarded for their work when compared to "non-damaging" ones.
"Q: How did they get so spend that money? A: Endless meetings."
Indeed. I've worked on and managed projects where the billable hours for meetings were 2 or 3 times as many as the billable hours for development.
I've also a few times worked on projects like that where as well as the client insisting 3 people from our firm attend each 1hr weekly progress phone conference, there were also multiple representatives from marketing, legal, and network ops on top of 4 or 5 stakeholders and their assistants. The specific project I'm thinking of there involved only about $12k worth of development "work". We billed ~$50k. I have no doubt the cost including internal expenses to the client for that project would have exceeded $250k and may have approached $500k. Interestingly, that client was perfectly happy with the way the project went, and we've worked for them again since then, with largely similar cost overheads.
This is one of the _big_ reasons small startups can out maneuver corporations. The project could have been completed for $12k, if someone was prepared to take a risk and was prepared to accept responsibility for letting the developers run with loose specs and trust them to make decisions when appropriate and ask for guidance when needed. And that's $12k at "outsourced to competent webdev firm" rates, a lean startup with at least one good tech founder would have done it themselves over a couple of weekends or a few weeks worth of evenings. Instead big corporations involve literally dozens of highly paid middle management and somehow approve half million dollar budgets to achieve exactly the same ends, just with accountability and avenues of blame to show for the large portion of that money.
(I'd love to land a similar client with a 40mil budget to "waste" this way though...)
Like I said, 10 programmers that do actual work. Even if you double that to 20 and add sysadmins, project lead, QA engineer and UX/designer, you still won't have more than 30 people, which is bigger than many startups' dev teams that build entire products rather than a single feature as in this case.
The rest goes to corporate managerial overhead, which was my point. Even if I underrated the size of the team, the difference is still merely 35M vs 38M. 35M is enough to take a startup company from nothing to a world-level player with the right team.
The costs of 10 programmers with a $120k salary is way more than $1.2M. You're forgetting to factor in employer paid taxes, benefits, and the costs associated with providing a work space.
I had the exact same reaction. I think it's a classic case of there being no upper bound on how much time or money can be consumed by a large organization trying to achieve some effect. They have amazingly labyrinthine and absurdly bloated ways of doing whatever they want. Like that saying that work expands to fill the time allotted for it. A given task generally can not be performed any faster than some specific lower bound. But there's no upper bound, and all you have to do is add more people, opinions, meetings, committees, processes, rules, laws, approvals, reversals, fights, dead ends, legacy architecture appeasement, technical debt, alternative explorations, dead time, vacations, etc. and you can blow up the time/dollar cost to whatever level you want.
Related note: I bet if some news organization used an off-the-shelf CMS like WordPress or Drupal, they could add a "paywall" to their site in less than a week, using mostly the services of a single engineer, and perhaps a designer. Let's call that a total project cost in the $400 to $4000 range.
ps. If any news organization decision-maker is reading this, I do indie contracting and would gladly add a paywall to your site for a mere... (pinkie in mouth) one million dollars!
It's a fairly complex problem. They probably wanted to model a bunch of different systems to 'prove' they were making the right choice. Ultimately that will determine who to congratulate or blame in 6 months so you can imagine everyone involved in the process was interested in staking a claim to success or evading the blame of failure. So take every facet of the paper's expenses/revenue and figure they ran the numbers dozens of ways for each minute part of the operation factoring in all their partnerships, ad buys, etc. They are a news gathering organization so they probably approached the problem in some depth. Plus they probably had good expense accounts so you know.. no need to rush it.
It seems like everyone thought the goal was "How do we charge for content" instead of "How do we provide value that people are willing to pay for content".
You're making an assumption the paper does not believe it does that already. But the paper does believe it provides value. News-gathering is, after all, its business model, and a proven one financially. As a model, providing things that people want to read and see is a very good one.
Does this include the cost of assessing various options, or how to design the pay wall? I'm sure that involved lots of meetings and manager man-hours. But 40m is ridiculous even given those managerial/administrative costs.
Well, if you are a hammer everything looks like a nail.
Getting people to pay for a newspaper on the web is actually not a programming problem and Bloomberg does not say that they spent $40-50 million on writing code. They spent that money “on the project”.
I’m not claiming that they succeeded or will succeed or that $50-50 million is an appropriate amount of money for such a project. All I’m saying is that the actual technical implementation of a pay wall is by far the tiniest challenge of the project.
I don’t know whether you have to spend a large portion of $50 million on it but market research seems like the most important part of such a project to me.
Are there pay walls that work well? What design patterns do these share? Is it possible to work together or meet those who built successful pay walls? What about SEO and advertising? (The next questions are best answered with an already existing firm knowledge of the possible alternatives:) What are current and potential New York Times readers willing to pay for online content? How do they want to pay? What online services are they currently paying for and how much?
Something that will (likely inevitably) also cost much is tying it all together. Meetings among high-level management are expensive but changing the business model is critical. My suggestion would be to have a small low-level independent team – preferably people who are working on the research or will be working on the implementation – come up with (very few) alternatives and to pitch those to management, limiting management’s involvement in the details. If possible the developers should probably also implement several alternatives and A/B test those.
It’s pretty clear to me that actual coding is only a small part of it. (Saying that it is a “tiny” part was a bit of an exaggeration.)
I guess it's possible I might be missing something here, but I can't for the life of me understand how this is so complicated and expensive. Is there a technical explanation somewhere? Are they adapting a non-adaptable proprietary CMS or something like that?
That's almost as much as Thomas Friedman's travel budget for the year. Seriously, though, the New York Times is on one end of the left <-> right media polarization spectrum (w/ Fox on the other end). You'd think the easier path to increased revenues would be adding content that appeals to the other half.
It's not canard. I'm talking about this from a business standpoint, not a political one. Regardless of whether you think that the NYT is liberal or FNC is conservative, most conservatives think the NYT is left-leaning and most liberals think Fox is right-leaning. So if a business is appealing to only part of the potential market, it seems the obvious thing to do would be to broaden your appeal.
And what if by broadening your appeal, you alienate your current readers without actually attracting any that you don't currently have?
Almost anytime a layman throws out an "obvious" solution for a problem, it is not the stupidity of the experts trying to solve the problem that has kept them from using the "obvious" solution.
This was horribly evident when people this summer kept coming up with terrible ideas for capping the BP oil well based on junk science and engineering, but it is often evident on business matters as well.
I think politics is too much of a us against them mentality to be successful doing that. They'd probably get bashed from both sides if they tried that.
With expenses like these, it's no wonder the old print media can't survive on revenue from online advertising and such. They're just too used to the old way of spending money and having huge costs tied to the delivery of news.
I think there's an understandable case to be made for the spending (when your future hinges on your digital properties, you can't really blame management for being scared and wanting outside advice - and lots of it.)
But it's hard to see how the Times can work this out, and it's worth remembering that the paywall is a desperate attempt to do this. Desperate people tend to pay more for even the simple things. There aren't any models worth using - if the Times is to get this right, it has to invent one on its own dollar.
Let’s stop a moment and behold the printed New York Times’ true gem: its Sunday edition.
It changes everything in our look at the paper’s digital equation:
- Sunday circulation is 54% higher than on weekdays (1.35m vs. 877,000).
- It’s an expensive package: $5.00 in New York, $6.00 elsewhere in the country.
- Sunday copy sales bring five times more money than any weekday.
- Advertising-wise, some analysts say the Sunday NYT accounts for about 50% of
the paper’s entire advertising revenue.
He suggests that it cuts out its daily paper, keeps the SundayEedition cashcow, and switch everything else to digital-only.
But it takes a lot of courage to do something so drastic. Till then, $40 million seems regrettably understandable - the price of being scared and unsure of one's future.
They "lost" $10B as a result of their investment strategy when the global financial crisis hit. They are far from the only people to lose money then. In any case that value was unrealized assets, so it's not like they actually had $36B in cash - as I hope you realize if they ever had to liquidate their assets quickly they'd get less than that - especially given they it liquidating that much would probably move the market.
They didn't spend the money wastefully, which is what the NYT seems to have done.
Your trite comparison is so far from useful it's not even wrong.
"In any case that value was unrealized assets, so it's not like they actually had $36B in cash"
I could equally say that if they liquidated that $26B quickly they would get less than that. I would hope the $36B and $26B were fair estimations of the asset value at the time.
Yes, exactly. Both are fair, market valuations, but (as in any case when you have illiquid assets) a valuation and what you get if you were to liquidate (quickly) are very different things. Cash is King for a good reason!
I used to work for work for a decent size newspaper company in a large metro area and they spent over 6 months to come up with a redesign for a home page that involved at least 4 or 5 different execs or managers in constant meetings, talks with an outside design agency about once a week. Oh, the 6 months only involved coming up with the mock ups not actual dev. That was a while another story with how much time was wasted on that.
So i imagine in a larger company, you would have more execs having constant meetings over a paywall, studies with how much profit they can make with pretty graphs to show how the stock price will jump because of the increase in earnings.
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[ 3.3 ms ] story [ 135 ms ] threadAll I know is, if I'd spent $40mil on a paywall, I'd be damn sure it was written to filter on the server-side, not with a client-blockable overlay like they have supposedly implemented.
Criticizing is easy, but while I have my concerns with the details of the Times' decisions, I'd bet that after a few tweaks, their paywall will be seen as a success in three years.
To just look at one little piece, this decision has massive SEO implications. I have some notion of what people qualified to comment on them cost. I'm not nearly the caliber of firm the NYT would stake their future livelihood on by engaging for this kind of work, but even absent that, the minimum possible scope for that SEO engagement blows $10k out of the water.
Realistically, we would all still be shocked if they had paid $2 million total.
I'm genuinely interested in hearing some ideas of what $8M of extra investment could buy in this case?
If there's nobody even close, then they will have massive spec churn.
Of course, actually getting buy in from the organization as a whole is the hard part. Technology is always the easy piece.
But at a $40 million price tag, someone somewhere is either dropping the ball, or someone is taking serious advantage with billing far more than reasonable for their services.
Aside from working on your own, are there any other real differences? I mean, I know that while being a decent C programmer, I wouldn't hesitate to point at people that are way better than I am, because they can produce more, better code, quicker. How's that work in the honest portion of the "SEO" world?
A few examples from our site upgrade to drupal 7... - comments permalinks were generating new identical pages under different URLs - paginated pages were getting indexed by category, by author, by month, and sitewide ... creating tons of duplicate content issues - the rel=canonical set up wasn't set up correctly either - some of the modules for things like related posts & page titles needed redone
And that is just 1 small blog, whereas when you view the NYT it is likely spread across multiple submdomains, multiple CMS tools, and they likely have different directly competing business objectives for different sections. They also have a variety of inbound and outbound syndication partnerships which likely add yet more layers of complexity & yet more competing business objectives.
Upgrading our site cost 10's of thousands, and that was while valuing my time at nothing. If my time was valued at market rate it likely could have been into 6 figures...and all this was doing was upgrading a few platforms to newer versions, changing the site design, and adding a new payment system. Add in the layers of complexity and bureaucracy you would see at a big slow moving corporation (and tons of money into conducting tests and research) and I am not surprised it was in the 10's of millions.
I know one of our clients had a million Dollar CMS that they ended up having to scrap because of major issues with it...am not surprised that integration of a semi-porous paywall at the NYT would be pretty expensive.
However why the price tag was not a maximum of $1,000,000 beats me. Possibly massive user and seo testing. Maybe a chunk was bribes?
There needs to be a Steve Ballmer at McKinsey.
[1] http://onpoint.wbur.org/2011/03/28/paywall-debate
Result:
Dumb, I know...but nerdly exhilarating.
"Developing the technology for paywalls is challenging because publishers are trying to strike the most profitable balance between charging some online readers and letting others in free to generate advertising and attention. Though Times Co. has said it will charge visitors after they’ve read a certain number of stories, for example, the company plans to let people coming to the website from social networks such as Facebook Inc. view an unlimited number of those stories for free."
I suspect that almost all of that budget went into market research. This isn't quite an A/B testing scenario. If you drive away potentially paying customers 50% of the time (in a worst case A/B test) then you are losing money. The potential for lost revenue in a "release early, release often" iteration approach may justify such a big budget. With so many factors, quite a bit of strategizing and research need to happen before putting things to the test.
[1] http://www.subtraction.com/2011/03/18/what-the-nyt-pay-wall-...
Seriously, while I appreciate the desire of programmers to think that we're smarter than the average bear, this is like saying StackOverflow is a clone-it-in-a-weekend site. It betrays a fundamental lack of understanding as to what is actually going on with the business model.
Even at $200k/year that's 100 developers for 2 years to implement what is essentially a subscription-based service. Even if you take into account the requirement to offer some level of free access for search engines and the like it still doesn't account for why this project cost this much money.
[1] http://www.eidosmedia.com/EN/Page/Uuid/83c5a8b2-ae9f-11de-9d...
[2] http://www.washingtonpost.com/opinions/behind-the-posts-rede...
http://www.techdirt.com/articles/20110317/10393913530/it-too...
http://news.ycombinator.com/item?id=2363697
http://news.ycombinator.com/item?id=2367132
Past experience at an old media company (who would have loved to have had a spare £40 million to spend delaying project launches) suggests the redundancies were people too busy doing productive work to produce job-saving Powerpoint presentations on how they were enhancing stakeholder value by synergising workflow processes.
But at least they'd be closer to cracking it than they are now.
(Personally, I think donations sought by non-profits are a better way to fund journalism, but that is decidedly pre-21st century.)
The Gray Lady is casting about wildly (probably before it really matters) in hopes of avoiding an uncertainty on par with the 1908 whip market.
No, they don't. The few that are around are in an extremely niche business that most of the world does not need or care about. They're for hobbyists.
It'd be interesting to know if the buggy whip manufacturers from 100 years ago actually survived (I sort of doubt it, but don't know) or were recreated/re-formed to serve the niche/hobbyist market, which I think would require a different sort of business and mentality.
There are plenty of free (paper) newspapers that are funded by advertising revenue. I don't see any reason in principle why it couldn't work for the online newspapers, who have lower overheads.
> I think donations sought by non-profits are a better way to fund journalism
You may well be right.
> that is decidedly pre-21st century
Except that it may well be easier to raise funds now with the internet. (Especially if/when we get a decent micropayment system.)
The ones here in Italy at least are complete fluff compared to 'real' newspapers, which do expensive things like send reporters to far-off lands.
I read one of those (Metro) on my commute to work every day, and it is, to put it mildly, very very bad. The reason they can be funded purely by advertising is because they seem to spend pretty close to zero on any sort of actual journalism.
Plenty of newsmagazines such as the Economist have healthy pay-for-content businesses.
would definitely involve being nimble, adjusting quickly (and relatively cheap). 40M on such a change doesn't look nimble.
If that's the case, it's even more depressing if the vast majority of the money didn't even go to people who had absolutely nothing to do with the actual implementation.
Can the shareholders of the NYT demand an investigation into this? Seems like this kind of ridiculous overspending should be something that would concern them.
1) 10 to 20 developers
2) 2 to 3 sys admins
3) 10 to 30 managers
4) 15 to 20 executives, from low level, all the way to the top.
5) Outside consulting design team that billed them at $500/hour.
Q: How did they get so spend that money?
A: Endless meetings.
Executive salaries add up very very quickly. Executives and managers absolutely loooove meetings, that's how they can pretend to do anything useful.
In reality they spend hours discussing the color and the thickness of the line under the logo and bullshit each other, while developers are half-asleep from boredom or are wondering - "WTF, did this dude just discover the internet? and why is he in charge?"
You wish.
I'm yet to see a company where (often clueless) executives don't override decisions of professionals.
I know a huge company where the CEO spent five weeks changing the curve of one of the letters in the logo, there were something like 25 iterations. Want to calculate how much that cost?
Iterations often end up costing the designers their margin. Especially if the company has a good name.
Indeed. I've worked on and managed projects where the billable hours for meetings were 2 or 3 times as many as the billable hours for development.
I've also a few times worked on projects like that where as well as the client insisting 3 people from our firm attend each 1hr weekly progress phone conference, there were also multiple representatives from marketing, legal, and network ops on top of 4 or 5 stakeholders and their assistants. The specific project I'm thinking of there involved only about $12k worth of development "work". We billed ~$50k. I have no doubt the cost including internal expenses to the client for that project would have exceeded $250k and may have approached $500k. Interestingly, that client was perfectly happy with the way the project went, and we've worked for them again since then, with largely similar cost overheads.
This is one of the _big_ reasons small startups can out maneuver corporations. The project could have been completed for $12k, if someone was prepared to take a risk and was prepared to accept responsibility for letting the developers run with loose specs and trust them to make decisions when appropriate and ask for guidance when needed. And that's $12k at "outsourced to competent webdev firm" rates, a lean startup with at least one good tech founder would have done it themselves over a couple of weekends or a few weeks worth of evenings. Instead big corporations involve literally dozens of highly paid middle management and somehow approve half million dollar budgets to achieve exactly the same ends, just with accountability and avenues of blame to show for the large portion of that money.
(I'd love to land a similar client with a 40mil budget to "waste" this way though...)
The rest goes to corporate managerial overhead, which was my point. Even if I underrated the size of the team, the difference is still merely 35M vs 38M. 35M is enough to take a startup company from nothing to a world-level player with the right team.
Related note: I bet if some news organization used an off-the-shelf CMS like WordPress or Drupal, they could add a "paywall" to their site in less than a week, using mostly the services of a single engineer, and perhaps a designer. Let's call that a total project cost in the $400 to $4000 range.
ps. If any news organization decision-maker is reading this, I do indie contracting and would gladly add a paywall to your site for a mere... (pinkie in mouth) one million dollars!
Getting people to pay for a newspaper on the web is actually not a programming problem and Bloomberg does not say that they spent $40-50 million on writing code. They spent that money “on the project”.
I’m not claiming that they succeeded or will succeed or that $50-50 million is an appropriate amount of money for such a project. All I’m saying is that the actual technical implementation of a pay wall is by far the tiniest challenge of the project.
Are there pay walls that work well? What design patterns do these share? Is it possible to work together or meet those who built successful pay walls? What about SEO and advertising? (The next questions are best answered with an already existing firm knowledge of the possible alternatives:) What are current and potential New York Times readers willing to pay for online content? How do they want to pay? What online services are they currently paying for and how much?
Something that will (likely inevitably) also cost much is tying it all together. Meetings among high-level management are expensive but changing the business model is critical. My suggestion would be to have a small low-level independent team – preferably people who are working on the research or will be working on the implementation – come up with (very few) alternatives and to pitch those to management, limiting management’s involvement in the details. If possible the developers should probably also implement several alternatives and A/B test those.
It’s pretty clear to me that actual coding is only a small part of it. (Saying that it is a “tiny” part was a bit of an exaggeration.)
market research (predicting uptake pricing and income), several failed experiments, fallback plans, advertising budget, internal restructuring, redundancy payouts.
"All Digital Access: $8.75 per week (billed every 4 weeks at $35.00)"
40e6 / (35*12) ~ 95000 yearly subscriptions (but 35$/month is revenue, not profit)
On the other hand, their circulation is:
876,638 daily
1,352,358 Sunday [2]
_________________________________________________
[1]: http://www.nytimes.com/content/help/account/purchases/subscr...
[2]: http://en.wikipedia.org/wiki/The_New_York_Times
Comically untrue from the perspective of someone disconnected from that spectrum.
Almost anytime a layman throws out an "obvious" solution for a problem, it is not the stupidity of the experts trying to solve the problem that has kept them from using the "obvious" solution.
This was horribly evident when people this summer kept coming up with terrible ideas for capping the BP oil well based on junk science and engineering, but it is often evident on business matters as well.
But it's hard to see how the Times can work this out, and it's worth remembering that the paywall is a desperate attempt to do this. Desperate people tend to pay more for even the simple things. There aren't any models worth using - if the Times is to get this right, it has to invent one on its own dollar.
Is there hope? Monday Note's Frédéric Filloux thinks that the NYT can be a digital-only enterprise: http://www.mondaynote.com/2011/03/27/the-nyts-melting-iceber...
He suggests that it cuts out its daily paper, keeps the SundayEedition cashcow, and switch everything else to digital-only.But it takes a lot of courage to do something so drastic. Till then, $40 million seems regrettably understandable - the price of being scared and unsure of one's future.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a... http://www.nacubo.org/Documents/research/2009_NCSE_Public_Ta...
They didn't spend the money wastefully, which is what the NYT seems to have done.
Your trite comparison is so far from useful it's not even wrong.
I could equally say that if they liquidated that $26B quickly they would get less than that. I would hope the $36B and $26B were fair estimations of the asset value at the time.
So i imagine in a larger company, you would have more execs having constant meetings over a paywall, studies with how much profit they can make with pretty graphs to show how the stock price will jump because of the increase in earnings.