3 ms·

Subscribers pay much less than the newsstand price, and you can haggle down from the advertised subscription price as well, so I think your estimates are way of

by sethg 17y ago

Subscribers pay much less than the newsstand price, and you can haggle down from the advertised subscription price as well, so I think your estimates are way off. The factoid I remember, although I can't cite a source offhand, is that the cost of printing and delivering a daily newspaper is just about equal to the cost that the consumer pays, and the rest of the newspaper's income is coming from advertising. If ebook readers were more widely used then it might be practical to run a newspaper by selling an online-only edition (perhaps making everything free on the Web after a 48-hour delay), but I'm not sure we're there yet. Also, I suspect that the first publisher to offer news in this way will be some upstart who is not encumbered by the sunk costs and contractual obligations surrounding a paper-and-ink newspaper.

ShabbyDoo 17y ago
When I read about the proposed 70/30 split, I thought that it was quite generous of Amazon! Let's presume that the cost of printing and delivery is equal to current subscription revenue. Amazon just gave the newspapers a huge increase in profitability (presuming everyone switched to a Kindle tomorrow). My sister-in-law is the business manager for a magazine with 250K subscribers. Their printing/distro costs exceed the average subscription price, so they'd be overjoyed if they could strike such a deal with Amazon and get their subscribers to convert over (unlikely).
- sethg 17y ago
  But you're not taking into account advertising revenue. I'm not sure a Kindle-based newspaper could attract as much ad revenue as a print newspaper, because the medium just isn't as attractive to advertisers; ads on ebooks or the Web feel much more intrusive to readers than ads in newspapers or magazines.
  - ShabbyDoo 17y ago
    I'm not sure either. Does Kindle allow for customized advertising? One problem this magazine has is that 40% of their subscriptions are outside of North America. It's a good thing overall, but they could increase ad revenue by printing two books -- one for NA and the other for "world" (mostly Western Europe in practice) and selling space in just one or the other.

by sethg 17y ago

ShabbyDoo 17y ago

When I read about the proposed 70/30 split, I thought that it was quite generous of Amazon! Let's presume that the cost of printing and delivery is equal to current subscription revenue. Amazon just gave the newspapers a huge increase in profitability (presuming everyone switched to a Kindle tomorrow). My sister-in-law is the business manager for a magazine with 250K subscribers. Their printing/distro costs exceed the average subscription price, so they'd be overjoyed if they could strike such a deal with Amazon and get their subscribers to convert over (unlikely).

sethg 17y ago
But you're not taking into account advertising revenue. I'm not sure a Kindle-based newspaper could attract as much ad revenue as a print newspaper, because the medium just isn't as attractive to advertisers; ads on ebooks or the Web feel much more intrusive to readers than ads in newspapers or magazines.
- ShabbyDoo 17y ago
  I'm not sure either. Does Kindle allow for customized advertising? One problem this magazine has is that 40% of their subscriptions are outside of North America. It's a good thing overall, but they could increase ad revenue by printing two books -- one for NA and the other for "world" (mostly Western Europe in practice) and selling space in just one or the other.