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NYT Plan To Charge People Money For Services Called Bold Business Move - vileru - 2011-03-29
duder Wrote:while I hate that it's going to become a pay-service, I recognize that there are immense costs involved with producing the NYtimes. It isnt just printing. You still need a building, employees, multiple offices, and huge travel budgets etc.The comparison to the music industry wasn't meant to be an exact 1-1 ratio. The comparison is on two specific points: printing and distribution, which align with CD production/packaging and distribution, respectively. Comparing the two industries based on these two points is fair and informative insofar as the comparison points to how production and distribution costs can be drastically lowered via digitalization.
Please stop comparing it to the music industry, it's an entirely different situation. Firstly the habits that people have regarding news and music are entirely different. Music has a much longer shelf life (75years I think), while much of the old news loses it's value soon after it is made available. News has to be constantly churned out to stay relevant. So, lets forget about the itunes comparison.
The music industry also doesn't have the problems that many papers have where "feeders" like the huffingtonpost constantly re-post reporting and take away viewership. The nytimes is the most widely read american newspaper, yet hardly makes a profit. It only makes sense that they want to try to bring in additional revenue sources. It is not a readily replaceable paper (they are keenly aware of this) and as such people who are really into it, should (and will)pay for it. User fees are nothing all that new.
As of 2010, NYT's annual wages and benefits totaled $592 million USD, whereas annual raw material and distribution costs amounted to $252 and $644 million USD, respectively (source). Based on these figures, the money saved by switching solely to digital production and distribution is roughly $896 million USD.
Obviously, the rough estimate of $896 million USD is ignoring digital production and distribution costs (digital storage and bandwidth) as well as other important factors affected by going 100% digital, such as advertising and marketing. Nevertheless, on first glance, a reduction of over $800 million in production and distribution seems to justify more savings for subscribers than just $10/month compared to the print edition. Certainly, the NYT isn't going 100% digital and most likely won't anytime soon. Regardless, I still suspect that the NYT isn't passing on the full savings or even just half of the savings to their subscribers.
Not to mention, newspapers don't only have to face the issue of going digital. They're also up against the internet itself. Why read a newspaper when you can go directly to the source? For instance, I completely ignored the newspapers when reading about the Fukushima incident. Instead, I went directly to the government's webpage, the blog of MIT's department of nuclear science and engineering, and other more-informed sources. With the advent of powerful search engines and direct access to sources, the role of newspapers is becoming evermore narrow. Competitive pricing alone won't fix the problems that newspapers are cowering from.