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Why do you assume that $20 is enough to support multiple newspapers? That's nearly how much the New York Times ($17/month) alone costs and they lost money ever

Why do you assume that $20 is enough to support multiple newspapers? That's nearly how much the New York Times ($17/month) alone costs and they lost money every year in recent history until 2018 and are only now turning the corner as a business. On the surface I'd assume that actual journalism -- not just clickbait opinion pieces -- is going to cost you way more than $20 a month if you want access to multiple sources.

CM30 6y ago
Don't many services that cost far more than journalism to produce charge $20 a month now? Netflix is $13, Disney+ is $7 a month, Xbox Game Pass is $10 a month... And those movies, TV shows and games cost many millions of dollars to produce. Why is journalism so much more expensive when journalists likely aren't earning hundreds of thousands of dollars a year and spending millions on investigations?
- kappuchino 6y ago
  On comparison: Take the movie "die hard". Since its creation 1988 (i feeld old) it has been rewatched time and time again and been paid for by nearly every channel and streaming service. Now look at an newspaper edition from christmas day 1988. Yes, it still costs less, but you would agree that it was already "old news" a couple of days after and rereading it is not really worth something to you, is it? One invisible cost in journalism is research and failure. I had a boss who humorously said "just research things that we will print", but in my area of experise in journalism - data and investigative reporting - more or less half of the research is a dead end, isn't interesting enough or has issues that make reporting unadvisable. Yes, sports has a better qouta, but has also taken over by bots writing the articles. Also: Can we agreee, that independence can only be achived with decent pay? It is an issue in other areas of work as well, but this is not about those. Journalists need to be paid well and (mostly) independent of their output or you already weaken/poison the base for independent news. And this scales more than you think. Now multiply this to have competition in journalism (like, gasp!, multiple newspapers/mags on the newsstand for one city) and it gets really, really expensive. All that cost was hidden when the only way to locally advertise was in paper (before the internet).
hootbootscoot 6y ago
That actually is a great way to bring up how miserably the Netflix model treats content creators. The $4 billion rich Netflix CEO says that artists should try harder if they don't want to starve (source, this same article we are discussing)
- zaroth 6y ago
  The Netflix CEO is (mostly) rich due to equity holdings, a market value of future cash flow. Netflix’s actual cash on the other hand has actually gone nearly 100% of revenue to content creators — they actually have taken out quite a lot of debt in order to create their content, because they think they can ultimately earn money on it over time. But truly you should thank Netflix for ~$50 billion in content creation so far.
- KSteffensen 6y ago
  Article quotes the Spotify CEO, not the Netflix CEO.
nikol_w 6y ago
This is the fallacy that led to the current broken model. Suppose that instead of paying $17 a month to get the NYT, I pay $20 a month to get that and five other similarly high quality news sources. Does this make it harder to fund journalism? Not at all. The NYT now has (for argument's sake) six times as many subscribers, all paying slightly more than six times as much. So do the five other organizations. And, since the consumer has a much better proposition, people who previously weren't paying will sign up and the total pot will be even bigger. Since all the costs are fixed costs, it doesn't matter if everyone reads six times as many articles. But they won't. They will read slightly more, but benefit much more by having a bigger choice. This is what we saw with Spotify. You pay about the price of buying one album a month. But you get to listen to much, much, more. Even if you only listen to a few songs a day, the utility of being able to choose from anything is huge. Of course, some people used to spend a lot more each month on physical music. But lots of other people used to spend nothing, since if you only had $15 a month, you could't get much for it. One problem is that the NYT, the the FT, the New Yorker, etc, each assume that they are uniquely trusted and loved by their audience. But that's only true because of selection bias. No one who values their output to the tune of $3 a month is part of their readership. In the music industry, the huge monopolists could force adoption of the new model. But they're also the reason musicians don't make much money, since they are now supporting two sets of middlemen - the tech companies and the 'record labels'.
- dragandj 6y ago
  Let's not forget that these music services are possible because the authors are paid peanuts, i.e, almost nothing for their work (other than a handful of the most popular chart topping acts). The thing with journalism is that you can't rely that much on back catalogs and artistic enthusiasm. An indie band might share all their music on Spotify for $1.37 a month revenue for the love of music, but that $1.37 will not buy you much of quality reporting...
- summerlight 6y ago
  > The NYT now has (for argument's sake) six times as many subscribers, all paying slightly more than six times as much. Not really, there must be an intersection between them and we don't know how large it is. And I don't believe there's many other magazine/news sites as successful as NYT so the revenue number is more likely 3x~4x even assuming no intersection and 100% conversion rate. The real issue is that traditional media's competitive edge was its infrastructure for content distribution, not the content itself. Sadly, people willing to pay money for high quality journalism seems minority so its budget is. Otherwise, ads-powered yellow journalism cannot be thriving as is. In this landscape, there's simply not much incentive to pursue such aggregated subscription model for media itself. Maybe there can be suitable business models for aggregators like FB or Google, but I don't think this is what you really want.
jariel 6y ago
"That's nearly how much the New York Times ($17/month) " With no unit-cost, volume is a big deal for such content. So if Times got 3x subs, they could cut their prices by 1/2 no problem. Car companies can't do that. So creating a good marketplace with demand and volume can do this.
- awalton 6y ago
  They've got somewhere north of 3 million online subscribers paying $17/month. It's not Netflix numbers, but it's still more than $600M/year - about a third of their claimed revenue. Their writers are salaried at $110K/year on average and probably around 1300 writers (given data from 2016), so that's about half their digital income for salaries. There's also the economies of price here that's often neglected - if they charged less, more people could and would pay for it. At $17/month they can forget it, I'll get my news elsewhere. At $9.99/month, it becomes a consideration for me. At <$5/month, I'm almost definitely in; I give $4/month to Nintendo so I can play Animal Crossing with a few friends a couple times a month. I'd normally happily spend $5-10/month at a Starbucks on a mocha as an occasional treat (you know, if it weren't for the whole pandemic thing). What I'm sure is really burning their income are holdovers from a bygone era - printing presses and their maintenance, prestigious billion dollar buildings in downtown New York City, and so on. There's no way the print side of the business is paying for itself anymore at the volume they're printing at... it's just time to let it go. And writers can work from literally anywhere... A curiously common refrain often heard here from tech workers.

CM30 6y ago

Don't many services that cost far more than journalism to produce charge $20 a month now? Netflix is $13, Disney+ is $7 a month, Xbox Game Pass is $10 a month... And those movies, TV shows and games cost many millions of dollars to produce. Why is journalism so much more expensive when journalists likely aren't earning hundreds of thousands of dollars a year and spending millions on investigations?

kappuchino 6y ago
On comparison: Take the movie "die hard". Since its creation 1988 (i feeld old) it has been rewatched time and time again and been paid for by nearly every channel and streaming service. Now look at an newspaper edition from christmas day 1988. Yes, it still costs less, but you would agree that it was already "old news" a couple of days after and rereading it is not really worth something to you, is it? One invisible cost in journalism is research and failure. I had a boss who humorously said "just research things that we will print", but in my area of experise in journalism - data and investigative reporting - more or less half of the research is a dead end, isn't interesting enough or has issues that make reporting unadvisable. Yes, sports has a better qouta, but has also taken over by bots writing the articles. Also: Can we agreee, that independence can only be achived with decent pay? It is an issue in other areas of work as well, but this is not about those. Journalists need to be paid well and (mostly) independent of their output or you already weaken/poison the base for independent news. And this scales more than you think. Now multiply this to have competition in journalism (like, gasp!, multiple newspapers/mags on the newsstand for one city) and it gets really, really expensive. All that cost was hidden when the only way to locally advertise was in paper (before the internet).

hootbootscoot 6y ago

That actually is a great way to bring up how miserably the Netflix model treats content creators. The $4 billion rich Netflix CEO says that artists should try harder if they don't want to starve (source, this same article we are discussing)

zaroth 6y ago
The Netflix CEO is (mostly) rich due to equity holdings, a market value of future cash flow. Netflix’s actual cash on the other hand has actually gone nearly 100% of revenue to content creators — they actually have taken out quite a lot of debt in order to create their content, because they think they can ultimately earn money on it over time. But truly you should thank Netflix for ~$50 billion in content creation so far.
KSteffensen 6y ago
Article quotes the Spotify CEO, not the Netflix CEO.

nikol_w 6y ago

This is the fallacy that led to the current broken model. Suppose that instead of paying $17 a month to get the NYT, I pay $20 a month to get that and five other similarly high quality news sources. Does this make it harder to fund journalism? Not at all. The NYT now has (for argument's sake) six times as many subscribers, all paying slightly more than six times as much. So do the five other organizations. And, since the consumer has a much better proposition, people who previously weren't paying will sign up and the total pot will be even bigger. Since all the costs are fixed costs, it doesn't matter if everyone reads six times as many articles. But they won't. They will read slightly more, but benefit much more by having a bigger choice. This is what we saw with Spotify. You pay about the price of buying one album a month. But you get to listen to much, much, more. Even if you only listen to a few songs a day, the utility of being able to choose from anything is huge. Of course, some people used to spend a lot more each month on physical music. But lots of other people used to spend nothing, since if you only had $15 a month, you could't get much for it. One problem is that the NYT, the the FT, the New Yorker, etc, each assume that they are uniquely trusted and loved by their audience. But that's only true because of selection bias. No one who values their output to the tune of $3 a month is part of their readership. In the music industry, the huge monopolists could force adoption of the new model. But they're also the reason musicians don't make much money, since they are now supporting two sets of middlemen - the tech companies and the 'record labels'.

dragandj 6y ago
Let's not forget that these music services are possible because the authors are paid peanuts, i.e, almost nothing for their work (other than a handful of the most popular chart topping acts). The thing with journalism is that you can't rely that much on back catalogs and artistic enthusiasm. An indie band might share all their music on Spotify for $1.37 a month revenue for the love of music, but that $1.37 will not buy you much of quality reporting...
summerlight 6y ago
> The NYT now has (for argument's sake) six times as many subscribers, all paying slightly more than six times as much. Not really, there must be an intersection between them and we don't know how large it is. And I don't believe there's many other magazine/news sites as successful as NYT so the revenue number is more likely 3x~4x even assuming no intersection and 100% conversion rate. The real issue is that traditional media's competitive edge was its infrastructure for content distribution, not the content itself. Sadly, people willing to pay money for high quality journalism seems minority so its budget is. Otherwise, ads-powered yellow journalism cannot be thriving as is. In this landscape, there's simply not much incentive to pursue such aggregated subscription model for media itself. Maybe there can be suitable business models for aggregators like FB or Google, but I don't think this is what you really want.

jariel 6y ago

"That's nearly how much the New York Times ($17/month) " With no unit-cost, volume is a big deal for such content. So if Times got 3x subs, they could cut their prices by 1/2 no problem. Car companies can't do that. So creating a good marketplace with demand and volume can do this.

awalton 6y ago
They've got somewhere north of 3 million online subscribers paying $17/month. It's not Netflix numbers, but it's still more than $600M/year - about a third of their claimed revenue. Their writers are salaried at $110K/year on average and probably around 1300 writers (given data from 2016), so that's about half their digital income for salaries. There's also the economies of price here that's often neglected - if they charged less, more people could and would pay for it. At $17/month they can forget it, I'll get my news elsewhere. At $9.99/month, it becomes a consideration for me. At <$5/month, I'm almost definitely in; I give $4/month to Nintendo so I can play Animal Crossing with a few friends a couple times a month. I'd normally happily spend $5-10/month at a Starbucks on a mocha as an occasional treat (you know, if it weren't for the whole pandemic thing). What I'm sure is really burning their income are holdovers from a bygone era - printing presses and their maintenance, prestigious billion dollar buildings in downtown New York City, and so on. There's no way the print side of the business is paying for itself anymore at the volume they're printing at... it's just time to let it go. And writers can work from literally anywhere... A curiously common refrain often heard here from tech workers.