Category Archives: business

Readers to the rescue! NYTimes gains in circulation

By Christopher B. Daly 

Yes, the New York Times company reported a sharp drop in earnings this week.

Yes, the figures for advertising revenue were wretched and getting worse.

BUT, buried in the financial details, there is some potentially important good news: Money coming in from circulation is rising. In fact, it rose 6.5% in the first quarter of this year compared to the same quarter a year ago. Therein may lie the salvation of the most important news organization in the country.

The reason is that “circulation revenue” is all the money coming in from the subscriptions to the traditional print edition, the dollars paid by folks picking up a copy of the Times at newsstands, and — most important of all — the money coming in from digital subscribers who bumped into the Times “paywall” and decided to pony up and pay for full access to the Times online. They are important because they are the future. In the digital era, the key metric is whether you can make money online. Historically, newspapers depended on a “dual revenue stream” of money coming from both circulation and advertising. For more than a century, both sources increased, and they fluctuated around a ratio of 50/50 in terms of total revenues.

If the Times can continue to gain readers who will pay, then there is no reason it could not sustain itself mainly on the basis of its own readers — who are, ultimately, a better base for journalism than advertisers. Thank you, Tiffany and Bloomingdales, and may your ad spending continue. But ultimately, the Times might be better off if it were funded like the old PM newspaper, or I.F. Stone’s Weekly, or NPR, or the AP or other news organizations that do not depend on advertising.

According to the latest figures, readers now account for a majority of the Times revenues.

Here’s a chart from the company’s press release.


First Quarter
2013 2012 % Change
Revenues
Circulation $ 241,789 $ 226,994 6.5 %
Advertising 191,167 215,234 -11.2 %
Other(a) 32,977 33,204 -0.7 %
Total revenues 465,933 475,432 -2.0 %

When I looked at the numbers more closely, here’s what I found on a percentage basis:

First quarter

[                                 2013               2012

Revenues

Circulation             51.8%          47.7%

Advertising            41.0%          45.2%

Other                          7.1%             6.9%

So, it appears that “the people formerly known as the audience” are pointing the ( or a?) way forward.

Readers to the rescue!

chart

This chart (which I customized using a tool on the NYTCo corporate site) shows how the NYTCo stock has performed in the last six months, compared to the Dow Jones average, which has been on a tear. 

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How do you say “paywall” in German?

By Christopher B. Daly 

The answer is: “paywall” (probably pronounced payvall). That’s according to Google Translate.

The fuller answer is in this piece in the Times, documenting a trend-let in setting up paywalls in Europe.

Whatever they are called, paywalls are emerging as the salvation (if there is one) for journalism, because the growth in online advertising is painfully slow.

source: TechCrunch

source: TechCrunch

 

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Clay Shirky on the journalism business model

By Christopher B. Daly

The new issue of the Columbia Journalism Review has a terrific piece by Clay Shirky about the current efforts to rescue journalism by finding a new business model for the news business. (Don’t get discouraged by the misleading — confusing? — headline.)

Shirky, who teaches about these issues at NYU’s Carter Institute of Journalism, compresses a lot of the points I made in my recent book, Covering America, in chapter 3 (about the rise of the Penny Press) and in chapter 13 (about the collapse of the “dual revenue stream” that financed journalism from the 1830s to the 1990s). In my book, the final chapter adds some recent success stories, showing how some digital natives are making a go of it in the new environment — doing great, serious journalism and, importantly, making money at the same time.

In my view, too many of us suffer from the historical fallacy of thinking that the present is “normal” and reflects the way things have always been. A lot of people, especially those over 35 or so, operate on the assumption that it is normal for journalism to be practiced by full-time employees of large, profitable corporations. In fact, by taking the long view, as I do in my book, it can be seen that the way journalism was practiced in the late 20th Century was not inevitable, not necessary, and certainly not permanent. It is already fading into the past as a distinct historical period, giving way to a present in which people are still figuring out the future.

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A media roundup

By Chris Daly 

–First, let’s pause a moment and let this sink in: Eastman Kodak has filed for bankruptcy protection.

This is the company that ruled photography in the 20th Century, the company that made photography a popular activity, and the company that really enabled photojournalism by making cheap portable cameras as well as flexible, lightweight film.

 

 

–Second, the chips are falling in the online piracy dispute. Regrettably, this issue appears to be turning into a shouting match. For all the advocates of “freedom,” the question remains: What about stealing the work of creative people? To be continued. . .

 

–Coincidentally, there was also a little-noticed SCOTUS ruling yesterday on copyright. Now, while I favor granting copyright to make sure that content-generators get paid for their work, I have to wonder how much sense it makes to impose new copyright restrictions on the work of dead foreigners. The purpose of the U.S. copyright law is to encourage creative output by giving Americans an economic incentive to write, compose, paint, etc. Putting new restrictions on “Peter and the Wolf” is not going to bring any new work out of Prokofiev (no matter how much his heirs may rake in). This, too, is not the answer.

 

 –Who knew that Twitter had all these features? (I should have but didn’t.)

–Finally, the gift (to media reporters) that keeps on giving: The Murdoch Hacking Scandal. Jude Law is smiling today because he is among three dozen victims of phone hacking by Murdoch reporters who have extracted “settlements” (i.e., payoffs) from Murdoch’s News Intl. The “nut graf”:

The apparent admission of a cover-up seemed likely to add to the challenges facing Mr. Murdoch in Britain. News International, the British subsidiary of News Corporation said it would not immediately comment, Reuters reported.

Andrew Cowie/Agence France-Presse — Getty Images 

 

 

 

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Romney coverage

By Chris Daly 

I am trying to resist the temptation to pile on Mitt Romney (Oh, all right: I am not trying very hard!).

When journalists assess his claims to be a job-creator through his work at Bain Capital, they need to dig a little. The important issue, of course, is whether Bain was a net job creator.

Take one case: Understandably, Romney is fond of citing his role in launching the office supply superstore chain Staples. His campaign boasts that Staples “created” 90,000 jobs (and sometimes 100,000 jobs). That may be true, although journalists should still check it. But even if true, it is not the whole story. Staples is what is sometimes called a “category killer.” That means that its success depends on — or at least results in — the elimination of a whole category of existing businesses. In the Staples case, the rise of all those superstores did not occur in a vacuum. Their growth came at the expense of many, many little mom&pop stationers that used to occupy storefronts in many downtown areas. Those independent small businesses are now almost completely gone from the American scene.

It’s the same process you see with Home Depot. As they grow, there go the little, local hardware stores that used to be everywhere. Same with WalMart and other “category killers.”

So, the question that journalists should pursue about Romney is: how many jobs were left after Staples wiped out the category known as the independent stationer?

Particularly in a party that venerates small businesses, that is a question that should have some political salience.

 

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Another one bites the dust

By Chris Daly

This is not another nostalgic piece about the demise of Filene’s Basement, prompted by today’s stories about the closing of the “legendary” discount retailer. (Fact is: I never really liked the place that much; in order to take full advantage of Filene’s Basement, you had to go there a lot, and I hate shopping, so it was not for me.) For people who care about the news business, the thorn on this withered rose is that there goes another source of display advertising for Boston-area newspapers.

When I was a kid delivering those newspapers in the 1960s, Filene’s department store (and not just the basement) did battle with Jordan Marsh from their proud flagship stores facing each other across Summer Street, and they competed with a slew of other department stores as well, including Gilchrist’s and some others I have forgotten. Back then, when those stores had “white sales” or wanted to tout their new fall fashions, or get ride of some extra mattresses, they took full-page ads in the big dailies.

Now, the area known as Downtown Crossing is literally a hole in the ground, from which no advertising dollars escape.

 

 

 

 

 

This is part of the reason that the Globe and the Herald are shells of their former selves. One of their most important revenue streams simply dried up — and shows no signs of ever gushing again.

Footnote: a whimper-out to Globe staff photographer Suzanne Kreiter for having her photo chosen to illustrate today’s story. The last-century photo dates from the heyday: 1988.

 

 

 

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Watchdog or cheerleader?

By Chris Daly 

After watching the recent documentary “Inside Job,” about the U.S. economic collapse in 2008, I couldn’t help wondering: Where was the business press during all the run-up to the edge of the cliff?

The film is not shy about pointing fingers at villains: greedy bankers, revolving-door  government officials who go to Washington to look out for Wall Street, academic economists who write “studies” that “show” that whatever Wall Street wants to do is rational, efficient, etc.

But while the film allocates plenty of blame to markets and to feckless regulators, it says nothing about an institution that is supposed to help protect consumers, investors, and the general public: the media that cover business. The well-paid reporters and editors work for newspapers, magazines, television and websites — everybody from the NYT and WSJ to the Economist and Forbes to CNBC. Where were they?

–Did they explain the rotten core of CDO’s before they imploded (i.e., when the information would have been really timely and useful)?

–Did they spot the housing bubble?

–Did they reveal how bogus the standards had become for subprime loans?

Or, did they do what they usually do — admire executives who had a good quarter, cheer for the Dow to rise, and repeat pro-business dogmas about low taxes?

Hmm… If any academics are looking for a topic to study, that might be a good place to start.

 

 

 

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