Sunday, February 01, 2009

Times v. Kindle

This one seems to be going viral but I am not ashamed to join the chorus, or pack, or throng:
Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle

Not that it's anything we think the New York Times Company should do, but we thought it was worth pointing out that it costs the Times about twice as much money to print and deliver the newspaper over a year as it would cost to send each of its subscribers a brand new Amazon Kindle instead.

Here's how we did the math:

According to the Times's Q308 10-Q, the company spends $63 million per quarter on raw materials and $148 million on wages and benefits. We've heard the wages and benefits for just the newsroom are about $200 million per year.

After multiplying the quarterly costs by four and subtracting that $200 million out, a rough estimate for the Times's delivery costs would be $644 million per year.

The Kindle retails for $359. In a recent open letter, Times spokesperson Catherine Mathis wrote: "We have 830,000 loyal readers who have subscribed to The New York Times for more than two years." Multiply those numbers together and you get $297 million -- a little less than half as much as $644 million.

And here's the thing: a source with knowledge of the real numbers tells us we're so low in our estimate of the Times's printing costs that we're not even in the ballpark.

Are we trying to say the the New York Times should force all its print subscribers onto the Kindle or else? No. That would kill ad revenues and also, not everyone loves the Kindle.

What we're trying to say is that as a technology for delivering the news, newsprint isn't just expensive and inefficient; it's laughably so.
So Nicholas Carlson at Silicon Valley Insider (link, and H/T Joel). Lots of commentators take shots at the argument: is he counting subscribers right? Is he ignoring the showcase value of airport newsstands, etc? But it's plausible and catchy enough that arrests the attention of people like me who don't give it much thought but find it believable anyway.

Local data input: we've been been getting the Fri-Sat-Sun NYT. Mrs. B is a paper person. I will scan it at the breakfast table, but I am as likely as not to repair to the laptop and read the same content there. One thing I do seem to read on paper only is the Sunday book review, and why is that?

1 comment:

The New York Crank said...

"Are we trying to say the the New York Times should force all its print subscribers onto the Kindle or else? No. That would kill ad revenues and also, not everyone loves the Kindle.

"What we're trying to say is that as a technology for delivering the news, newsprint isn't just expensive and inefficient; it's laughably so."

Sounds to me as if we're deep in conundrum country here. We can have (after the first year) virtually no raw materials and distribution costs along with no revenue-producing advertising, or we can have advertising with "laughable" technology.

Choices, anybody? Personally, I opt for a loud scream.

Crankily yours,
The New York Crank