Adam Reilly at the Phoenix has quite the scoop: looks like the NY Times Co. has threatened the Globe with a total shutdown unless the Globe’s unions agree to $20 million in concessions. Reportedly, pay cuts, pension contributions, and job guarantees are all on the table.
Adam also has a memo sent by the head of the Boston Newspaper Guild to his membership:
[T]his was a confidential meeting – and this union is nothing without its word. So I intend to keep the details of the meeting private as promised by that agreement. Unfortunately, other people have not and rumors are circulating.
Here is what I can tell you. The Globe and NYTimes management painted a not-unexpected dire picture of the Boston Globe’s financial situation. They are looking for financial concessions from all unions. Again, this is not unexpected given the recent 5 percent pay cut for managers across the company (that 5% management/exempt pay cut comes with an additional 10 paid personal days for management/exempt – making any giveback a virtual wash).
Pretty grim. So what’s our Plan B if the Globe shuts down, or suffers a long downtime while management and the unions work it out?
UPDATE: I found this nugget from the Globe’s write-up to be hilarious:
Catherine Mathis, a Times Co. spokeswoman, declined to comment. Globe publisher P. Steven Ainsley also declined to comment.
Right, ’cause God forbid the people whose sanctimony about others giving the public the information it needs knows no bounds should offer a comment when the story’s about them, for a change! đŸ˜€
This looks serious, boy I hope this is just a scare tactic it would be unbearable having to listen to that Rag Herald crow they out lasted the Globe. Don’t get me wrong the globe is not perfect but it is a real paper not a grocery store rag at check out that the Herald is.
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p>Lets cross our fingers and light a candle
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p>As Usual Just my Opinion
With my local teachers union that voted down joining the state health plan that would save (or most likely reinvest back into the schools) $500,000 for our community…yes, I’m slightly off topic and I’ve got many thoughts about the demise of the newspaper business…but right know I have the two opposing images in my mind: One in which the Globe says the situation is so bad we may close (a similar situation facing lots of companies) and another in which an insulated union gives the bird to the community as a whole. What happened to the concept of ONE MASSACHUSETTS?
http://www.boston.com/business…
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p>So it is pretty official.
For a regional paper, it has okay distribution numbers and amazing online numbers. Whatever problems the Globe has are mostly contributeable to the NY Times, imo.
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p>Not saying that some (more) concessions may not be needed, because the Times did pretty shitty things to the old bird, but $20 million? If they want me and people like me to believe it, they ought to open up the books and show where a $20 million+ defecit is coming from.
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p>Otherwise, it’s an assumption I’m not willing to buy. If I were the head of the union, I wouldn’t agree to any concessions without seeing those numbers in public.
The Globe cut its own throat. Both the bow tie mob and the Guild. Now they are all about to reap the whirlwind.
When I was young there were five newspapers in Boston and the Globe was a good read. Now reading the Globe is like reading Pravda. Oh well. Now the Massachusetts hacks have one less adversary. Soon they will be able to run amok.
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p>The previous comment is typical shortsightedness. What did Dirty Harry say? “Do you feel lucky today—punk? Well do ya?” I have always been prudent when warned in good faith that ill is lurking around the corner.
The comparison is really not accurate, at all. In “the day” there were aparatchiks who approved or did not approve stories, no investigative work at ALL in either PRAVDA or ISVESTIA and they both had the nimbleness and turning radious of a WWII battlepocked tank.
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p>”Ne Pravdu f’Isvestiu – Ne Isvestiu f’Pravdu” was the old chestnut of a joke.
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p>Pravda is the Russian word for truth.
Isvestia is the Russian word for news.
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p>The above quote translates to: “there is no truth in the news, and no news in the truth.”
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p>Those were the days, indeed.
I don’t think it takes too much research to realize that the newspaper business as a whole is sucking wind. The old cash cows of ads are gone (classifieds to Craigslist, Real Estate has entirely moved to the Internet – what RE agent wants to fork over house listings for a teeny ad to the Globe, when you can post pix on Realtor.com).
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p>Stand your union ground for sure, if that makes you happy. But the sad fact is that the Globe (and just about every other newspaper out there) is the proverbial buggy whip manufacturer circa 1900 right now. Where that leaves Boston.com I’m not sure.
For five years or so the Globe has been urging municipal unions to do whatever Menino asked them to do. There have been countless editorials calling for various city union concessions.
Now I guess it’s time for Globe unions to take the same advice the Editors have been sagaciously offering municipal unions: don’t ask questions, just suck it up.
It’s consistent with the owners’ anti-union worldview. They have always resented any instance of workers having a say in the conditions of their employment.
Open up the books. If the NY Times and Globe are in such dire shape, prove it to the world. Otherwise, my sneaking suspicion is that their profits are down and they want to take advantage of the situation and reap whatever they can now, so they make even more money when the economy is back up.
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p>The newspaper industry has always been profitable. The major reason why some papers are now having trouble is because of the massive debts they took on, one to gobble up the other. Take away that, and you don’t see any paper in Colorado or Seattle shutter its doors.
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p>That’s not the only problem in terms of delivering good ROIs, but it is certainly one of the only reasons why any papers over the past few months went under. Not unions. Not craigslist. Not blogs. Not Filenes. Just huge fucking debt that never should have been taken. For those papers — let them die. The NY Times suffers from large debt too, but probably not unmanageable debt — and it’s not the Boston Globe’s fault that the NY Times purchased them for so many hundreds of millions. The unions may have to suffer for it anyway, but they shouldn’t until they see the books.
Unions: “Open up the books.”
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p>NYT: “No.”
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p>Unions: “Please?”
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p>NYT: “No.”
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p>Unions: “But newspaper industry analyst Ryepower12 tells me you should. He says that ‘one of the only reasons’ for the recent demise of major newspapers in the US is all the ‘huge fucking debt’ their parent companies have taken on in acquiring other papers.”
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p>NYT: “Never heard of him. But out of curiosity, does he say what the other reasons are? Has it occurred to him that Craigslist has decimated newspaper ad revenue? That this is a structural problem affecting the entire industry, and not just the result of a business decision made at this newspaper company alone.”
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p>Unions: “Glad you asked. He specifically rules out Craigslist. Oh, and he says that the New York Times ‘probably’ doesn’t have unmanageable debt. So ha!”
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p>NYT: “Really. How does he back up these conclusions?”
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p>Unions: “Open up the books.”
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p>NYT: “No.”
was mine, not Mr Lynne’s. Anyway, was that really necessary? I mean, come on.
But I’m just tired of Ryan’s dismissive stance towards the Globe (which point I also make in my reply to him below).
Believe me, I would much prefer the Globe were a great paper. That’s why I criticize it. (And, btw, I do complement it when they do a particularly great story – the Partners/Blue Cross series is Pulitzer worthy.)
Just curious.
I think the Globe’s pretty cool- and without it we would have precious little to talk about here on BMG.
The Washington Post is a great newspaper that the Globe would do well to emulate — bearing in mind that the Post is having its own issues embracing the web revolution.
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p>The Post has a home-field advantage, because “local news” to the Washington Post is “National” or “Political” news everywhere else. Nevertheless, when crucial events are unfolding the Post is always a reliable source of solid background facts.
but is it a great Metro paper? There are different standards of goodness for papers. Does the Globe really need to be covering national and international events with the type of depth of the Times or the Post? As a subscriber to both the Times and the Globe, I personally would just like the Globe to focus on its local, metro and regional coverage.
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p>
Other than saying a long-winded (and not funny at all) neener-neener?
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p>If the NYT and Globe truly need $20 million to get back in the black, they should prove it to the unions. Otherwise, unions have no reason to assume anything, especially from an entity that supposedly deals with primarily facts making large demands without justifying them using facts.
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p>The NYT may need the $20 million to stay afloat, or they may want the $20 million to appease their shareholders. If it was the former, I’d imagine they would have made these demands a while ago… and it probably would have leaked out well before now.
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p>BTW – if you think Craigslist alone (or even primarily) is driving the NYT bankrupt, I have a bridge to sell you. I’ll go post it on Craigslist right now, subject heading “Stupid people should buy this.”
is that you’ve offered nothing but a high-road strategy (appealing to truth, facts, etc.), and high-road strategies are pointless unless part of a many-pronged campaign that a small industrial union like the Globe’s is in no position to mount. It’s not about what the NYT “should” do, it’s about what they can be encouraged or forced to do. Nowhere do you offer a plan for forcing the NYT to open its books.
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p>What you offer, though, is anything but fact-based: a “sneaking suspicion”; an assertion that the NYT debt is “probably not unmanageable”; what you’d “imagine”; and lots of what the various parties “may” have to do. All this, coupled with your endless disparaging of the “MSM” and the “Glob” over the years (now here’s a man who knows funny!) has made me rather less inclined to take seriously your thoughts about the present or future of newspapers.
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p>So I’ll just ask point blank: How do you suggest the union get the NYT to open its books? And in what you consider to be the unlikely event that those books actually contain some horrific numbers, do you have any ideas for what to do next? Or do you think the Globe is just so totally useless that we can just let it go and rely instead on the Herald and the likes of Kim Khazei?
They’ll lose a lot more than $20 million a year if they do that. It’s a threat from management, who happens to be in a stronger position at this point.
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p>
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p>You’re right. I don’t have the facts because the NYT/Globe haven’t given them to me. All I have is their word. I have no reason to actually believe their word — they can feel free to prove it to me, though. At the very least, they should prove it to their union.
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p>
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p>Well, the NYT – in its quest to remain in existance – may choose to give the union those numbers. The unions should make at least that demand before they slice open their marrow.
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p>
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p>If you ever read my blog, I tag Globe stories with “Boston Globe.” It’s my third or forth most frequently-used tag. Obviously, I rely on the Globe. Do I think the paper’s gone a bit downhill and suffers from many common problems found in the MSM? Sure, but I would by no means suggest it should go under if it can be saved. That doesn’t mean I think the unions should make gigantic cuts without evidence, though.
I have better things to do with my Saturdays than take up academic debates on BMG. This is a potential real catastrophe for the Boston region, and I think it’s important to (a) take the NYT’s threat seriously, especially in light of the fact that daily papers in Denver and Seattle just recently went kaput, and (b) begin considering alternative futures for the Globe.
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p>But you repeat that the NYT “should prove it to their union” and that it “may choose to give the union those numbers,” [my emphasis in both quotes] so I guess I’ll just have to conclude that your strategy for winning this battle is simply to cajole a very powerful employer to do the right thing, pretty please, just because. Good luck! An organizer at my union who proposed such a strategy would probably be out of a job fast. (This said, I’m sure the unions are indeed demanding to see the numbers, but I’m also sure that they know they have little power here ultimately.)
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p>And I stopped reading your blog sometime during the first months of the Patrick administration, because the juxtaposition of analysis and commentary on his administration with a photo of you and Patrick arm-in-arm made me doubt your ability to be properly critical.
Nice.
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p>Note that I’ve been exceptionally critical of the governor, especially on casinos and his tendency to release plans without the necessary means to accomplish them.
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p>My final word on the union/employer situation: when did I ever say they shouldn’t make concessions? I just said they should do so knowing the facts and in a fair manner. Seems like that’s what they’re doing. But, please, by all means, take a few words of mine and throw them way out of context — and throw in insult in there for good measure. That must make you feel a lot better about wasting your Saturdays here on BMG. (BTW – that’s your choice. If you have better things to do, go do them.)
the reporting may be suspect, but all the available reporting shows that your assumption is not correct. The Globe itself doesn’t have massive debt payments, AFAIK, since it hasn’t been gobbling up other papers (NYTCo does have debt issues, but that’s a different subject). The problem is that the Globe is losing over $1 million a week in operating expenses. That’s not sustainable for any length of time.
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p>Look, newspapers have basically two sources of revenue: advertising, and selling the dead-tree editions, with the latter becoming rapidly irrelevant. So when advertising dollars dry up, the business goes into the crapper. That’s exactly what’s happened, with a vengeance that no one foresaw, because while the movement of classifieds and real estate advertising to the (much cheaper) internet was known and ongoing, the drastic economic downturn caught pretty much everyone by surprise, and the combination is devastating.
There is no question that other media is sucking up available ad revenue, but a lot of people still do read the paper (we are really quite far away from the print editions becoming “irrelevant” as you claim) and will continue to do so indefinitely, so there is still a lot of money to be made by the Globe as long as they can keep their costs in line. The question is how much of the loss in revenue is associated with the recession and is therefore temporary versus the permanent loss due to our changing media environment? The answer to that question is needed for the unions to determine what concessions they should make. No doubt long term and short term concessions are needed but you can bet that the Times is going to be asking for only the former.
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p>In many ways newspapers are a more media target for advertising because print editions cannot be electronically filtered to strip out ads. I never see ads on the internet because I use software to block them. Given that technology and things like Tivo, in the long run the only advertising that can be expected to reach consumers is that in print media, billboards, movie theaters, internet search engine results, and other such channels that cannot be easily filter out by the consumer. This would suggest that as long there remains a market for physical newspapers, they are going to be attractive to advertisers. If newspapers can figure out how to customize the papers content and advertising to different target audiences they could charge more for ads. So rather than moving entirely to an online format, I think that papers should instead invest in more sophisticated technology to format, print and deliver the paper to increase their value to advertisers.
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p>One thing is for sure. Readers don’t buy papers primarily for the ads. They buy them for their non-advertising content. Anything they do to lower the quality of the content will lower readership both in terms of number of subscribers and with how long readers spend perusing the papers, both of which lowers the value of advertising. So they have to be very careful not ruin their product in the quest for cost cutting.
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p>
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p>No, it’s not. It’s almost certainly one of the largest problems. The reduced level of ad revenue is certainly a concern, but for most papers out there that have gone under, it’s only the compounding problem.
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p>It’s always the company that does the gobbling that has the debt problems, David. They expect the company they gobble up to be profitable enough to pay for the debt they took on to acquire the paper. That’s exactly what happened with the Tribune, the Colorado paper and the SPI.
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p>Is it what’s wrong the Boston Globe? It seems more likely to me than the alternative, but the NYT is free to make their case to the unions. Instead, they issue a huge threat with little to back it up. I’m sorry I don’t blindly take the assumptions of a corporations at face value, David, but no one should when they could easily have ulterior motives.
http://www.irishtimes.com/news…
First, as a public company, the NYT’s books are pretty much open…every quarter we know by properties (papers) revenues, loses, ad linage ect and you can bet that the unions are on each quarterly confercene call when the Times is grilled by Wall Street analysts.
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p>Secondly, sure you have a point that many businesses bought high and used debt to finance things when times were “good”. (It ain’t just home mortgages and credit default swaps that got us in this mess.) But all that is is an explaination of what the problem is (along with the perfect storm of all the other factors outlined) and it offers no path towards a solution. Am I hearing you correctly that, “Huge debts caused this problem so the NYT should not be closing down the Globe?”.
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p>The bottom line is, no matter what caused the problem (in reality, there are lots of serious wounds–some self inflicted) drastic measures are going to have to be taken to save the Globe (and the rest of the newspaper industry).
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p>IF the unions do make concessions, hopefully they can get an upside IF the paper survives…like a nice chunk of equity. What does the Times have to loses giving arranging a deal like that…?
Of course NYTCo has huge debt problems. That’s why they’ve mortgaged their building in the worst real estate market in decades, for God’s sake. And that’s probably why they’ve unwilling to continue to absorb the Globe’s losses.
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p>But the Globe’s operating losses are the issue, not NYT’s debt. Even if NYT had no debt at all, the Globe would still be losing a million bucks a week, and again, AFAIK, the Globe has no significant debt to speak of (certainly, it has none due to ill-advised acquisitions). Regardless of the owner’s presence or absence of debt issues, no one can long sustain a business that’s losing a million dollars a week in operating costs.
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p>The Globe’s problems are not the same as those of NYTCo, or Tribune Co., or others that have significant debt problems. The Globe is losing money because it costs more to run the business than the business is bringing in, period. If they don’t fix that pronto, no more Globe. Simple as that — and it has nothing to do with debt.
Doesn’t really enter into it. This is not a matter of the Globe being unable to turn a large enough profit to service the Times Co.’s debt. This is the Globe losing money – $50 million in 2008, a projected $85 million in 2009.
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p>And, good Lord, of course Craigslist has a lot to do with it. There’s a difference between blaming Craig Newmark, which would be stupid, and blaming his brilliant idea, which is just a matter of reality.
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p>Did you notice the conciliatory statements issued by the union guys in today’s Globe? Guess what? They looked at the books.
…anyone out there up to that?
if you could somehow get the Obama Administration to outlaw Craigslist, and maybe undo the May-Federated merger (and for that matter, move BMG to scattered shots on the Letters to the Editor page), I don’t think you’re exactly going to find too many folks willing to invest in the newspaper business. I always thought that the prevailing opinion of “local” around here meant intelligent; don’t think you’ll find too many local investors looking to take over the Globe (or any other newspaper for that matter).
they’ll be up for it again, especially when the economy improves. The NY Times will have to sell it at a huge loss, but that’s something they should do. It was never worth so much in the first place.
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p>But will someone buy it? I have no doubt. It’s still a nationally recognized paper, despite the fact that the NY Times has tried desperately to regionalize it. Owning a paper is a little like owning a sports team. They may make a profit, but never a huge one. Owning something like that is as much for prestige (and to control the ink, in a newspaper’s case) as it is to make lots of money.
Maybe I should have compared it to owning Dunken Donuts. DD was taken off the public markets for a reason — it made profits year in and year out, but never huge in comparison to the costs of production and building the stores. The profitability of Dunks (or super markets) is in the volume that they sell. The profitability in newspapers may be more like 5-15%… that doesn’t thrill shareholders, but a small ownership group? A small ownership group happily bought out Dunks…
a 15% return on our 401K…
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p>With the downturn averaged in, since 2005 or whatever, it stands at around 6%. :-/
that’s what happens when companies leverage a brick with a feather. Unfortunately, these huge ROIs over the years were really fake… which only makes the stable profits of the newspaper industry, before they gobbled each other out by greatly inflated numbers, all the more pleasant. Whoops!
if you’re looking at the reality of the business. Did make me laugh with that well-intentioned bill to let newspapers convert to nonprofit status as an answer; believe me, taxation isn’t exactly their biggest problem right now as you don’t pay taxes when you are losing money hand over fist.
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p>Might want to peruse DK’s column:
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p>http://medianation.blogspot.co…
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p>I don’t entirely agree with Dan on the increase to $2 for a local paper, but this isn’t about over leveraged buyouts taking out newspapers; the problem really is that the things that created your stable profits are gone and they’re not coming back any time soon.
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p>Newspapers made their money through classifieds and big store ads. Remember back in the day when the Globe was more than about 30 pages long? Huge full page ads from Jordan Marsh and Filenes every day (oops, May-Federated took those out of play). Also remember when the Real Estate section meant people in the market for a new house drove to the local convenience store late Saturday night to get the early drop on open houses (forget the front, we just want to buy the inserts). Oops, forget that, just fire up Realtor.com. Heck, they even have multiple color pictures. Talk to any realtor right now; who wants to waste money advertising in a newspaper?
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p>Or lets talk about running an ad to sell that old piano. Should we run a classified for $75? Nah, put it on Craigslist. Job listings? Online boards.
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p>Ryan, the newspaper business model is destroyed from a revenue standpoint. I don’t want to see the Globe fail any more than you do (or the Herald for that matter – 2 papers in a city is healthy) but technology has killed this business model. And where exactly does this leave Boston.com in the mix (for which we pay exactly $0 to peruse)?
How’d you like to see Jack Welch back in the picture? Maybe he’d put his buddy Mike Barnicle in charge. Be careful what you wish for.
The Boston Globe, in particular, has kept its head stuck firmly in the sand while the world changed around it. The Globe, along with the rest of the print industry, chose to fight the new technology rather than embrace it.
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p>They’ve lost the fight.
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p>Hyperlocal publishing is, in fact, exploding. Consumers like you and me have more access to better information than we’ve ever had in human history. The Globe made a bone-headed business decision, years ago, to fight the new technology rather than embrace and leverage it.
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p>The Globe is not the first, nor will it be the last, dinosaur to die as a result of its own failed strategy. The economic cataclysm sweeping our culture is a catalyst, but not the cause.
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p>We consumers remain hungry for information. New ventures will spring up to replace those that have failed. The sun will continue to rise in the east and set in the west. The good journalists who have contributed so much will find new ways to ply their trade.
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p>Music did not die when Tower Records shut their doors. Journalism will not die when the Globe shuts its doors.
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p>This is, in my opinion, an example of how the free market works well. Some companies will die, others will be born to replace them.
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p>Just my two cents.
…who still prefers print for hardcore news?
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p>I would much rather sit down and flip through a newspaper than stare at a computer screen and click links to find everything. When I peruse a paper I might come across something that I would not have bothered clicking the link for online. BTW, I’m only 31, so it’s not like I’m a dinosaur myself.
Personally, I can’t think of any. Some entities that relay news reported by others — Google News, Yahoo — but no profitable internet-only websites. ProPublica, GlobalPost … no profits there. Maybe tiny ones at places like TruthDig?
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p>Thus, I’m not sure there was, or is, such a huge opportunity to “embrace and leverage” as you suggest.
when you skipped over “entities that relay news reported by others — Google News, Yahoo –“
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p>I think that sites that do for news what youtube does for video and wikipedia does for reference material are emerging and will displace traditional print media.
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p>I wasn’t suggesting that the readers were dinosaurs, I directed my characterization towards the companies that fought the web.
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p>I think the news genre is being transformed into a space where there is a ton of un-vetted raw stuff, most of it rubbish, and where the audience (that’s us) will demand and perhaps even pay for trusted editors and reviewers to curate the raw material and separate the wheat from the chaff.
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p>We see the same phenomena happening in scientific publications, with traditional print journals being displaced by entities like plos.
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p>Many of us prefer reading material from hard-copy, and companies that produce that hard-copy for us may well spring up. There is no fundamental requirement, though, that those publishers be the same company as whoever it is that provides the information. I think I could even make an argument that such independence will result in better, rather than worse, journalism.
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p>I think we should remember that in the early 1980s, the introduction of free or very inexpensive personal desktop publishing caused many traditional document publishing companies to similarly crash and burn. A generation of typographers, editors, art directors, designers, and so on were convinced that their industry was “gone”. After a short period of “kidnap letter” in-house publications, the “desktop publishing” industry was born — and with it, a huge expansion in the demand for those typographers, editors, art directors, designers, etc.
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p>A forest fire is sometimes good for the wilderness.
I like that. You are now sounding like a true capitalist.
A “compassionate capitalist”.
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p>I don’t think there needs to be any dichotomy between “capitalist” and “progressive”.
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p>I think that, like it or not, we live in a capitalist economy. That implies that we live in an economy optimized to reward capitalists. Yet our political culture (strongly encouraged by our media) encourage us to think like wage-earners — workers — you know, the ones that capitalists oppress (and they surely do!).
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p>What too few of us realize is that, unlike a few short years ago, today anyone can be a capitalist. ANYONE. It is breathtakingly easy to form your own business venture, launch your own website, and voila — you’re a capitalist.
This is a myth. They give the paper away for free on the web. And have been for what, 11 years? Boston.com is a money-losing information-leaking hole which would be nothing without the paper Globe.
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p>Newspapers were too forgiving to the web in order to build an audience, and just hope that would turn into money somehow.
They do not “give the paper away for free on the web”.
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p>Have you noticed the ads that run in the margins?
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p>The product of any free (non-subscription) web-based site is the attention of its visitors.
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p>The customers of any free (non-subscription) web-based site are the advertisers.
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p>Web-based publishers who understand this therefore understand that the single most important thing they can do is to attract and keep visitors to their site. “Eyeballs”, “eye candy”, and all that.
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p>If boston.com is a “money-losing information-leaking hole”, then it is being badly managed — it gets lots of traffic, the traffic is loyal, and it has lots of ads.
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p>The Globe fights the web by, for example, perpetuating the idea that “Boston.com … would be nothing without the paper Globe.” Wrong. Dead wrong. In the modern world, precisely the opposite is true.
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p>Broadcast media is not free, the content of broadcast media is not “given away”. The jury is still out on subscription-based versus free “narrowcast” media, like boston.com. One alternative is to offer a “free” advertising-based site, and invite visitors pay a monthly subscription to receive the same content without advertising.
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p>This comment is turning into a diary entry, I think I’ll stop here for now.
The web is losing money. No matter what the audience is, the ads don’t pay for what is on the page, especially if the story is by a Globe reporter. They simply can’t charge what they charge for the paper edition, because nobody clicks ads on the web. It’s possible that the paper ads were overpriced, but that still doesn’t solve the problem.
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p>If the Globe continues in its relationship with Boston.com along the current trajectory, here is how it will wind up: all the reporters and editors will be fired, the paper edition will disappear and with it all the production staff, and the web site will run AP stories about Boston. That is all the ad revenue from Boston.com will buy!
Does either BrooklineTom or Seascraper know the actual numbers on ad revenue online? I have no instinct whatsoever what the revenue is from boston.com vs. the costs for hosting and managing the webpage. I suspect that it’s profitable if you go at it from the perspective that the news articles have already been written, so the only additional cost is bandwidth and server overhead, which is really low on a per-article basis.
I read an article which included stats from the Washington Post. I can’t remember the numbers but there was a huge difference in ad revenue between a print subscriber and a web visitor. I think they made 50 times as much off each print subscriber.
what is happening to their circulation? How many people are dropping their subscriptions in order to read the Post online? How many people read the online version from outside the DMA (like me) because they can’t get the hard-copy version on the morning it’s printed?
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p>Here is the “2009 General Ad Rates” card published by the Washington Post (and provided by their online site, I might add!).
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p>From the above link, the Post has a daily circulation of 666,434 and a Sunday circulation of 912,433. It claims 1.4M “adults in the Washington DMA” as the traffic on washingtonpost.com.
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p>It is very difficult to translate these numbers to or from traffic statistics, or to compare print returns from online returns. It is not difficult to see the advertising market shift from print to online for the Washington Post as well as the Boston Globe.
http://www.american.com/archiv…
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p>http://adage.com/article?artic…
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p>I was working at an ad agency when the web first exploded, and even at the time I could tell it was going to be trouble to the entire system of marketing and advertising. My Cassandra act got me fired and I missed the next 10 years of agency income because I thought the disappearance of mass media was just around the corner, but anyway things are happening like I thought.
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p>You are right that there is a way to use the internet to communicate with customers but it’s not mass media and there is no room for all the money companies put into their old media buys.
Mass media thrived on the economics of scarcity. The internet represents an economy of unending abundance.
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p>This is the kernel truth of the new era.
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p>The “red-ocean” economics of the industrial age were premised on value created by scarcity — the scarcity of physical atoms. One supplier’s gain came at the cost of another’s loss, and the competitive ocean ran red with the blood of the resulting conflict.
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p>Information is different, fundamentally. Bits want to copied. In an information economy, value is created by abundance, rather than scarcity. In particular, any attempt to artificially create scarcity will ultimately fail.
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p>In the old economy, when I had a creative brainstorm, it was bad news if I discovered that somebody else was doing the same thing. In the new economy, it’s good news — it suggests that the idea is a good one, good enough that other people as smart as me have already thought it up.
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p>One blog is a terrible source of information about a specific problem. A hundred blogs — perused, distilled, cross-checked, and validated — are a breathtakingly valuable source of information.
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p>The natural world around us demonstrates the abundance paradigm in spades if we will but see it. Trees produce many more leaves than they need. Genetic variation produces an abundance of new life forms — and natural selection picks out the winners (or, more accurately, kills the losers).
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p>Absolutely. In spades.
Whatever the ad revenue is, it is surely not enough to pay the costs, direct and indirect, of legions of workers dedicated to the acquisition, production, and distribution of bundles of paper with ink printed on it.
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p>The audience has said, overwhelmingly, that it wants its information online. Yes, there are some who continue to want hard-copy. Perhaps there are even enough of them to sustain some sort of publishing operation.
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p>The point, though, is that there are not enough of them to attract the advertising revenue needed to pay the costs of those legions of workers I mentioned above.
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p>The typical consumer has learned that if he or she wants to know about the next special from Macy’s or Stop-And-Shop, he or she can sign up on the website of Macy’s or Stop-and-shop and get that information. If he or she doesn’t want to know, then running the ad doesn’t change that. That means that Macy’s and Stop-and-Shop are using their advertising budgets to draw visitors to their own websites. There is zero benefit to Macy’s or Stop-and-shop from paying for a print ad in local newspaper. Zero. That’s why they don’t buy.
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p>It is exceedingly dangerous, as the writers and editors at the Globe and at Boston.com are no doubt discovering, to assume that the news articles have already been written when you neglect to address the question of how you pay the costs of those who actually do the writing. The illusion that it’s profitable is created by externalizing the net cost of creating the news articles.
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p>I think it’s a bit like Exxon/Mobil reporting record profits, while externalizing the trillions of dollars it costs to prop up the governments and protect the oilfields from which Exxon/Mobil extracts their raw material. The taxpayer, rather than Exxon/Mobil, ends up paying those externalized costs. When included, “profits” of Exxon/Mobil dissolve away.
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p>As does the illusion of affordable gasoline in the US.
I think the WSJ and USA Today. The Journal has found a way to integrate their on-line and print models that seems to work. Still, they’re lousy businesses to invest in. And their future is iffy.
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p>If the Globe folded, some other news outlets would emerge to fill the vacuum.
Wasn’t the Globe always a proponent of union labor, at least if the taxpayer paid for it? At least I never read of their support of right-to-work laws, the modulation of PLAs, or elimination of prevailing wage rules.
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p>Ironic that the 13 (thirteen!) unions are likely the source of excess costs killing the Globe. Sweeet. It’s certainly not the cost of ink.
Ironic
By subscription only, at $39.95 per year. Print + on-line is $100
It gets bandied around a lot, and it somehow appeals to logic.
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p>But, where’s the data? What does the classified ad revenue curve (adjusted for inflation) look like over time? How has people’s propensity to buy used change over time, in light of a continuous move toward cheaper, short-lasting consumer goods?
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p>I’d love to see a revenue line chart, showing print ad, classified ad, real estate ad, job ad, newspaper sales revenue, Internet ad revenue, etc. How has the revenue stream really changed, our pre-conceived notions and instincts notwithstanding?
Boston.com was the only one of the top 10 newspaper sites that lost page views from December 2007 to December 2008, according to Nielsen NetRatings. The average increase was 16%, with nytimes.com up 6% and boston.com down 6%. That’s somewhat worrisome.
the NYT and Boston Glob fail.
How many Ellen Goodman or Paul Klugman left wing rants can one read without developing terminal nausea?
These mouthpieces of biased liberal doctrine will not be missed by folks who just want unbiased reporting of the news and just the FACTS sans partisan spin