A more accurate formula would be, if 5% of the people who currently come to our site for free pay $5 a month we would have X amount of dollars. His assumption that 100% of the people viewing now paying subscribers is obviously false.
Given his pricing, he doesn't seem to be assuming that at all. He's assuming that some fraction of them will pay $7.50 per mo or 40 cents per day, etc.
This also has the bonus effect of greatly reducing delivery costs. More revenue and less overhead.
Conclusion: the NYT is about to die. I can't read it any other way, there simply are too many competitors in the general space that a newspaper operates in that people will continue to subscribe in large enough numbers.
It's a simple problem really: In the past - before network news came along - the newspapers had a near monopoly on news coverage. With the coming of the networks that changed, the newspapers focused more on giving the background and the in depth version of the networks based 'sound bytes' and flashy presentation.
Then the web came along, a disruptive technology if there ever was one. So, now both the networks and the newspapers are manning the pumps. A nice example is the plane recently downed in the Hudson, within minutes there were photographs on Flickr and facebook, from the eye witnesses themselves.
Newspapers would be a day old at a minimum when they landed in your mailbox, but it was news to you. Now they feel like something that you might as well put under the cats litter box right away, you've already had plenty of opportunity to read everything in there except for the background & opinion pieces online 10 times over by the time you get the paper version.
And it's not like there is a shortage of background and opinion pieces on the web either. Maybe not from salaried journalists, but interesting and often informative just the same.
To quote Nicholas Negroponte: If your business is shipping atoms carrying information you have a problem.
I disagree. I think there is absolutely still a need for quality newspaper reporting. You may get pictures of plane crashes on Flickr, but nobody besides a professional news organization is going to uncover secret CIA prison camps. A blogger can't just figure that out surfing the web.
The problem isn't so much competition from Flick and facebook as it is Craigslist stealing all the classified ad revenue. And the fact that people don't like paying to read things on the web.
There is a need for the reporting, no dispute about that. But if your newspaper dies it isn't going to be the one to employ those reporters.
First one to crack a business model where they can send out reporters a-la the NYT but without the overhead of running a full fledged newspaper is going to hit it big time.
Oh, and about that secret CIA prisons thing, that was actually leaked by someone inside to a reporter, it could have been leaked on the web just the same.
No, it couldn't have been leaked just the same. If you think that, you should talk to some journalists.
Top news reporters have vast networks of sources that help them dig up that sort of information. That particular story may have leaked one way or another, but without well-connected journalists, many of the leaked stories we read would never be told, or would be lost among the thousands of rumors and innuendos published on blogs daily.
There are very few web-only sources that get quality leaks. It's fairly common for a website to break a story that the big dogs passed on, then to have it take off, but to actually get the information before the MSM is fairly rare.
Hmmm... I love investigative reporting - but it will completely die out when good newspapers come along.
The problem is that 80% of the news newspapers sell are commodities. Go to news.google.com and you get 10 articles from different papers on the same subject.
90% of people will not pay anything to read the 10% of investigative stories.
I work for smaller metro paper, Austin American-Statesman. There is some amateur(non-pejorative meaning) coverage of local news(a lot of it comes to us via twitter, our comments and blogs). There's the ubiquitous weekly paper that competes in the "where do I get drunk/laid" niche.
But local (and Texas political) news is owned by us. esp in depth news. It's a small market and really no one else wants to compete.
Local is the near-future of news organizations. Nationals are fucked.
I would gladly pay $55/year for access to the NYT online. I read at least 15 NYT articles per day on my iPhone ad-free every day. The quality of the articles is top-notch. The UI (of the iPhone version) is perfect and intuitive, and I'm surprised it's been free for so long. I'm guessing they make almost zero from online advertising in relation to print, so they don't have much to lose by going pay-only.
I think it is very shrewd how they emphasize making it EASY to pay for each article. I would absolutely click a little 'pay $0.10' button. The trouble of pulling my credit card out of my wallet, typing everything in, worrying how the website is storing my info, etc. is a much higher cost than the $0.10. Eventually someone is going to figure out how to do easy large-scale micropayments, and it will be huge. Maybe iTunes will just expand scope forever.
I'm not certain that this is an internal (or leaked) memo - this reads like someone publishing advice to the NYT, especially considering some of the more fantastical suggestions that are not as much based in reality (merge with cnn.com!).
[EDIT] Some more light research on Steve Brill leads me to believe that he does not work for the Times Company.
Not 'leaked'. But still a good idea, especially when you look at his numbers on average revenue per visitor and compare it to current print+web revenues.
Incidentally, my thought was to make articles 25c on the day it's published, free from 7-21 days, and then $1 for articles older than 21 days.
Pay for things that are newsworthy, or that are 'archive', but still let the web spread the info for free. The folks who depend on being early to the party, or the folks who are late to the party, pay for that privilege.
You don't pay the price you'd have to pay if it didn't have any advertisements either... In Montréal (at least) they even give some newspapers in the subway.
My assumption is that the cost of producing a digital copy is significantly less expensive than the paper version. (I'd appreciate any links to studies on this.) If it's true, then advertising should not be necessary to defray cost.
TV producers have been slowly moving their expensive content to pay TV and producing new low-cost shows ("reality TV" and gameshows) for broadcast. Plus, they use their broadcast channels as the stick to beat cable/satellite operators' into paying more for their cable channel bundles.
For example, Disney moved Monday Night Football from ABC (free) to ESPN (the most expensive non-premium channel). Larry David effectively moved "Seinfeld" from NBC to HBO. Dance and singing contests, primetime gameshows, and hours and hours of news broadcasts (5:30-11:00am, 12:00am, 4:00-6:30pm, 10:00-11:00pm where I live) have replaced dramas and comedies. The dramas and comedies that are left are whatever ones that HBO didn't want.
The NYT will die because they are not a must-have source of news or views.
I find cringe-making purple prose on the front page of the NYT every time I pick one up.
The writing is entirely too "precious", in spite of the many good writers they have.
Further, their recent strategy of hiring alt-weekly writers to try and give them an "edge" to their reporting has only accelerated the decay - people can tell when you are posing.
I believe that the only way to make customers pay for articles again is in conjunction with hardware (such as the Kindle) and an online store (such as iTunes). I hate reading long articles on my monitor. (I do it because there's no other option than buying the paper - but for one article?.) I'd be happy to pay in order to be able to read a good article on the subway. Not $1/article, mind you, but even a few cents per article would turn into a nice sum of money for the newspapers.
35 comments
[ 3.8 ms ] story [ 100 ms ] threadBottom line is that there just isn't enough money in online ads to support the Times' journalism.
This also has the bonus effect of greatly reducing delivery costs. More revenue and less overhead.
It's a simple problem really: In the past - before network news came along - the newspapers had a near monopoly on news coverage. With the coming of the networks that changed, the newspapers focused more on giving the background and the in depth version of the networks based 'sound bytes' and flashy presentation.
Then the web came along, a disruptive technology if there ever was one. So, now both the networks and the newspapers are manning the pumps. A nice example is the plane recently downed in the Hudson, within minutes there were photographs on Flickr and facebook, from the eye witnesses themselves.
Newspapers would be a day old at a minimum when they landed in your mailbox, but it was news to you. Now they feel like something that you might as well put under the cats litter box right away, you've already had plenty of opportunity to read everything in there except for the background & opinion pieces online 10 times over by the time you get the paper version.
And it's not like there is a shortage of background and opinion pieces on the web either. Maybe not from salaried journalists, but interesting and often informative just the same.
To quote Nicholas Negroponte: If your business is shipping atoms carrying information you have a problem.
The problem isn't so much competition from Flick and facebook as it is Craigslist stealing all the classified ad revenue. And the fact that people don't like paying to read things on the web.
First one to crack a business model where they can send out reporters a-la the NYT but without the overhead of running a full fledged newspaper is going to hit it big time.
Oh, and about that secret CIA prisons thing, that was actually leaked by someone inside to a reporter, it could have been leaked on the web just the same.
Top news reporters have vast networks of sources that help them dig up that sort of information. That particular story may have leaked one way or another, but without well-connected journalists, many of the leaked stories we read would never be told, or would be lost among the thousands of rumors and innuendos published on blogs daily.
There are very few web-only sources that get quality leaks. It's fairly common for a website to break a story that the big dogs passed on, then to have it take off, but to actually get the information before the MSM is fairly rare.
The problem is that 80% of the news newspapers sell are commodities. Go to news.google.com and you get 10 articles from different papers on the same subject.
90% of people will not pay anything to read the 10% of investigative stories.
But local (and Texas political) news is owned by us. esp in depth news. It's a small market and really no one else wants to compete.
Local is the near-future of news organizations. Nationals are fucked.
[EDIT] Some more light research on Steve Brill leads me to believe that he does not work for the Times Company.
Incidentally, my thought was to make articles 25c on the day it's published, free from 7-21 days, and then $1 for articles older than 21 days.
Pay for things that are newsworthy, or that are 'archive', but still let the web spread the info for free. The folks who depend on being early to the party, or the folks who are late to the party, pay for that privilege.
I wonder, could this work? NYT is trading below $5 today, so that's like ~10% discount on a year's subscription.
What about broadcast TV stations? Anyone with an antenna can receive them and has been able to for decades, and I think they're a "viable business."
And you, jackowayed, could you please split that line in two?
Please?
TV producers have been slowly moving their expensive content to pay TV and producing new low-cost shows ("reality TV" and gameshows) for broadcast. Plus, they use their broadcast channels as the stick to beat cable/satellite operators' into paying more for their cable channel bundles.
For example, Disney moved Monday Night Football from ABC (free) to ESPN (the most expensive non-premium channel). Larry David effectively moved "Seinfeld" from NBC to HBO. Dance and singing contests, primetime gameshows, and hours and hours of news broadcasts (5:30-11:00am, 12:00am, 4:00-6:30pm, 10:00-11:00pm where I live) have replaced dramas and comedies. The dramas and comedies that are left are whatever ones that HBO didn't want.
But saying that no solid business has ever been based on free is just plain wrong.
I find cringe-making purple prose on the front page of the NYT every time I pick one up.
The writing is entirely too "precious", in spite of the many good writers they have.
Further, their recent strategy of hiring alt-weekly writers to try and give them an "edge" to their reporting has only accelerated the decay - people can tell when you are posing.