Felix is Bewildered

Felix Salmon is too polite to put it quite that way, but he really can't imagine what kind of lunatic designed the new pricing policy at the New York Times.  Me neither but I do note that about 10 minutes after the Times email, I got one from the Wall Street Journal calculated (I think) to make me believe that the Journal is cheaper.

Shorter NYT on Food Stamps

One in four American kids is on food stamps. Link.

(Thanks, Francine.)

Ayn Rand and Noam Chomsky would Applaud

New York Times read of the day:

Goods Flood Gaza’s Tunnels,
Turning Border Area Into a Shopping Mecca

Link.

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?

Slim Gets Fat

So now Carlos Slim has a deal to put money into the New York Times (or maybe he doesn't--this thing looks awfully complicated). Not quite preferred, but a note with warrants with is close enough for government work. The note is a zero with a rate of 14 percent; Brad DeLong is gobsmacked and forecasts an early (or at any rate, a medium-term) bankruptcy.

He's right to be impressed but recall (a) "bankruptcy" need not mean "going out of business;" it may be a "sale to the creditors" where the going concern chugs along at a lower speed (kinda like the world economy, huh?); and (b) Slim must figure he is getting something out of the deal--if nothing more than the option to be the owner of the brand.

$250 now for $400 later, bleah. But if you pencil it out at three years and seven months, that works out just about right. ($400/1.14^(3+7/12)=$250.

Preferred?

The Wall Street Journal reports that Mexicon zillionaire Carlos Slim is dickering for a piece of the New York Times in exchange for preferred stock.

Hello, preferred stock? Isn't that so, um, maybe 1935? So regulated-public-utility? So antique?

I know that people have bandied around the idea of "preferred stock" as a strategy for government intervention in the banking crisis. But that would be a way to jump the ideological blinders about government ownership of banks. Other than that, the standard mantra is preferred stock doesn't make any sense because the tax treatment is all wrong. And that investors don't like it because the contracts are all tailor-made and thus hard to value.

But one thing about preferred, like so many other hybrid securities: it's a tempting alternative for the debtor who can't get liveable loan terms, and doesn't want (desperately hopes not) to give up control. Could it be that we are in a new era of preferred, as anemic companies lurch desperately forward under the burden of sagging income and bloating debt?

Well, That's a Blessing...

David provides us with an early edition of the July 4 (2009) New York Times.

Who, Sir, They Sir? No Sir, Not They Sir!

My friend Larry laments over the future of the language, or at any rate, the absence of grammarians from the NYT copy desk:

Six years ago, he met Teresa Hillary Clarke at a party on Martha’s Vineyard in Massachusetts, where both spent summer vacations with the same African-American crowd, many of who, like they, went to Harvard, teach at Harvard or have children studying there.

From the Times'Sunday wedding feature. Who, they?

Newspapers and the Great Sucking Sound

In which I highlight two stories about the news biz:

• The New York Times paywall is crumbling: very good news? You're cheering? "Very bad news," says Michael O'Hare, "stop cheering" (link). Sure, it means you'll get free access to Maureen, for the moment. But the real point is that not even the Times can figure out how to make money in the news biz. "Enjoy your free Times Select while it lasts, folks," says Michael, "that sound you just heard was not the triumph of free information over selfish profiteers, it was the sound of the iceberg opening up four or five compartments below the waterline.

• Meanwhile Michelle Leder, who wades thorugh all those securities filings, has hit upon a story that perhaps needs more attention than it has received (link). It's about Gannett, the chain of chains, trading near its ten-year low. Michelle finds that they've adopted a "Transition Compensation Agreement," (link) aka provision for rats who want to leave a sinking ship.