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Ignoring the silly, uninformed arguments (i.e. newspaper readers "have never paid for the content") I'm in agreement with you about the piece in general, but t

by bonaldi 18y ago

Ignoring the silly, uninformed arguments (i.e. newspaper readers "have never paid for the content") I'm in agreement with you about the piece in general, but this specific point isn't silly. Newspapers readers haven't ever paid for the content: the advertising has always paid for that. If readers were footing the bill for the content generation, a copy would cost $10. It's this fact that also allows freesheets to prosper, when the reader pays for nothing at all. I'm surprised at you rejecting that. It's usually the uninformed who think readers pay for the content.

timr 18y ago
Here's a transcript of an interview with a guy who studies the news industry. According to this, subscriptions paid for nearly half of newspapers' operating costs as recently as the 1960s: http://onthemedia.org/transcripts/2009/02/06/03 http://onthemedia.org/transcripts/2009/02/06/03 Moreover, the NY Times' most recent 8-K shows that 30% of quarterly revenues were from subscriptions (subscriptions were up by nearly 4% from the previous year, by the way). That's $234 million in revenue in the fourth quarter alone: http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6364862-5020-71285&type=sect&TabIndex=2&companyid=5788&ppu=%252fdefault.aspx%253fsym%253dNYT http://google.brand.edgar-online.com/displayfilinginfo.aspx?... For what it's worth, it's also easy to disprove the notion that people won't pay for content on the web. The New York Times was making upwards of $10M/year with its Times Select subscription service when it closed in 2007, and that was just for archives and editorials (not news content): http://www.paidcontent.org/entry/419-new-york-times-to-close-timesselect-effective-wednesday http://www.paidcontent.org/entry/419-new-york-times-to-close... (Aside: How many dot-coms do you know of that are generating over $10 million a year in ad revenue?) Now, I suppose you could argue that since these numbers aren't higher that subscriptions never paid for content, but I dispute that notion. Subscriptions were traditionally a significant source of revenue for newspapers, whereas the author of the editorial wants you to believe that they were trivial revenue streams, and that it's impossible to get people to pay for content in the New Media world. In fact, if you look at the numbers, it's pretty clear that the Times is suffering mainly from declining advertising revenues -- which if anything, is a great indication that they should be charging for content. That's why I said that the editorial writer's point was silly. He didn't do even basic research to back up his assertions.
- bonaldi 18y ago
  There's an interesting UK/US divide here -- I'm in the UK, where most papers don't have a subscription, and where the cover price contributes substantially less to a paper's revenue. That said, even at their 1960s best I think it still stands that US readers "don't pay for content". They paid for less than half of operating costs by your figures, and this in what we now think of as a newspaper gilded age where competition was substantially less. Now you may say that operating costs can be lower today, and would be vastly lower if the dead trees were out of the picture, and you'd be correct -- but it's still not a rosy picture for journalism if it has to depend on selling its wares directly to the public, instead of selling the public to advertisers. It calls for a complete culture shift on both sides: journalism has in the past been subsidised so heavily by advertising that readers have never had to bear the expense of its creation. That's the real problem, which the author doesn't really get across. It's not that people won't pay for online content at all, it's that they won't pay enough -- they won't pay enough to meet the costs of creating it, and they certainly won't pay enough to meet the current profits that persuaded investors to back newspapers. Yet without their regional monopolies, the media groups can't make enough from advertising to cover the shortfall. That's why the talk is now all about alternative business models. It's just difficult to think of a plausible one, because by its very nature journalism burns up cash. It's somewhat similar to venture funding, in that you pay reporters and photographers good money, and often they come up with nothing and only occasionally hit the jackpot. To get investors to take those sorts of risks with cash, there has to be a good return. And for the sums that we're talking about here, the opportunity cost of sinking it into journalism can be very high indeed.

by bonaldi 18y ago

timr 18y ago

Here's a transcript of an interview with a guy who studies the news industry. According to this, subscriptions paid for nearly half of newspapers' operating costs as recently as the 1960s: http://onthemedia.org/transcripts/2009/02/06/03 http://onthemedia.org/transcripts/2009/02/06/03 Moreover, the NY Times' most recent 8-K shows that 30% of quarterly revenues were from subscriptions (subscriptions were up by nearly 4% from the previous year, by the way). That's $234 million in revenue in the fourth quarter alone: http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=6364862-5020-71285&type=sect&TabIndex=2&companyid=5788&ppu=%252fdefault.aspx%253fsym%253dNYT http://google.brand.edgar-online.com/displayfilinginfo.aspx?... For what it's worth, it's also easy to disprove the notion that people won't pay for content on the web. The New York Times was making upwards of $10M/year with its Times Select subscription service when it closed in 2007, and that was just for archives and editorials (not news content): http://www.paidcontent.org/entry/419-new-york-times-to-close-timesselect-effective-wednesday http://www.paidcontent.org/entry/419-new-york-times-to-close... (Aside: How many dot-coms do you know of that are generating over $10 million a year in ad revenue?) Now, I suppose you could argue that since these numbers aren't higher that subscriptions never paid for content, but I dispute that notion. Subscriptions were traditionally a significant source of revenue for newspapers, whereas the author of the editorial wants you to believe that they were trivial revenue streams, and that it's impossible to get people to pay for content in the New Media world. In fact, if you look at the numbers, it's pretty clear that the Times is suffering mainly from declining advertising revenues -- which if anything, is a great indication that they should be charging for content. That's why I said that the editorial writer's point was silly. He didn't do even basic research to back up his assertions.

bonaldi 18y ago
There's an interesting UK/US divide here -- I'm in the UK, where most papers don't have a subscription, and where the cover price contributes substantially less to a paper's revenue. That said, even at their 1960s best I think it still stands that US readers "don't pay for content". They paid for less than half of operating costs by your figures, and this in what we now think of as a newspaper gilded age where competition was substantially less. Now you may say that operating costs can be lower today, and would be vastly lower if the dead trees were out of the picture, and you'd be correct -- but it's still not a rosy picture for journalism if it has to depend on selling its wares directly to the public, instead of selling the public to advertisers. It calls for a complete culture shift on both sides: journalism has in the past been subsidised so heavily by advertising that readers have never had to bear the expense of its creation. That's the real problem, which the author doesn't really get across. It's not that people won't pay for online content at all, it's that they won't pay enough -- they won't pay enough to meet the costs of creating it, and they certainly won't pay enough to meet the current profits that persuaded investors to back newspapers. Yet without their regional monopolies, the media groups can't make enough from advertising to cover the shortfall. That's why the talk is now all about alternative business models. It's just difficult to think of a plausible one, because by its very nature journalism burns up cash. It's somewhat similar to venture funding, in that you pay reporters and photographers good money, and often they come up with nothing and only occasionally hit the jackpot. To get investors to take those sorts of risks with cash, there has to be a good return. And for the sums that we're talking about here, the opportunity cost of sinking it into journalism can be very high indeed.