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Wednesday, February 4, 2009

Replace the newspaper with the kindle?

Silicon Alley Insider (Digital Business, live!), Nicholas Carlson, has done some arithmetic, and reckons it would be cheaper for the New York Times to send everyone an amazon kindle than print and deliver the paper each day.

Not that he recommends it to the publisher, but after doing his sums he came up with a figure of $644 million delivery costs per year. This is on the basis that the NYT spends $63 million per quarter on raw material and $148 million on wages and benefits. (What about the trucks that deliver the bundles to the stands? And the man who tosses the paper on your stoop?)

In a recent open letter NYT spokesperson Catherine Mathis said that there are 630,000 loyal readers who have faithfully subscribed for more than two years.

Sending all those people a free kindle would cost a little less than half, apparently.

What Carlson hasn't factored in is that the NYT comes online everyday, so is already absolutely free. One wonders how they do it.


adam hartung said...

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Rick Spilman said...

Nicholas Carlson needs help with his arithmetic. In 2007, the last period for which a full year's financials are available, the Times had revenues of $3.2 billion, most of which was from advertising. Around $330 million of that was from on-line advertising or roughly 10%.

The one thing that the Kindle does really well is plain text. Its graphics are grey scale. It does not play video. It is not so great for advertising. So whatever they might save in production costs they would lose several times over in ad revenues.

The other thing they would lose ironically is all the great web only content in video and other multimedia.

As I loyal subscriber who reads the NY Times on both newsprint and one of several screens, I think they are moving in the right direction. They have roughly 50 million unique viewers on-line every month. The challenge is to figure out how to monetize all those eyeballs.

Joan Druett said...

Totally agree with what you say, Rick. I read the NYT online every day -- several times a day, because I subscribe to updates. And I really miss my "real" NYT -- I was one of those loyal subscribers for three years, in Long Island.

Kindle wouldn't hack it for me.

I also thought his arithmetic very suss. Where did he pick up that ballpark figure? And as you say, he didn't factor in advertising revenue -- which I gather helps with the online paper, as well.