Do want to know why our economy sucks? It's because people like the following writer pose as "experts," and we listen to them. (I was led to this silly-ass story by a huge, screaming headline in The Huffington Post, which is becoming less and less useful as a news source these days…)
This is from "the Wire," at a website called The Business Insider. Read it very carefully:
At a conference in London, Arthur Sulzberger Jr conceded that someday the New York Times Company will be forced to stop publishing a printed paper.*
This sounds obvious, but it's a big deal.
The economics of the online news business will not support the infrastructure or newsroom that the printed paper supports.
Unless the New York Times Company can come up with a miracle new digital revenue stream, therefore, it will eventually have to be restructured and downsized (or sold to a deep-pocketed Sydney Harmon-type who runs it at a loss out of love).
Importantly, even a successful online paywall will not allow the paper to maintain its current cost structure.
Now, this article was written by a man named Henry Blodget, who is the Editor-in-Chief and CEO of The Business Insider. In fact, according to his bio, he used to be a "top analyst" on Wall Street. Well, maybe that explains it. Oh, wait… a better explanation can be found later in the bio:
1994-2001, Henry worked on Wall Street at Prudential Securities,
Oppenheimer & Co., and Merrill Lynch. He ran Merrill's global
Internet research practice and was ranked the No. 1 Internet and
eCommerce analyst on Wall Street by Institutional Investor and
Greenwich Associates. He was later keelhauled by then-Attorney General
Eliot Spitzer over conflicts of interest between research and banking and booted out of the industry.
Okay, that explains a lot. He knows how to give bullshit advice, but he doesn't know much about business. And he got "booted" off of Wall Street. Can you imagine what you have to do to get booted out of the securities industry?
That's enough about him. Do you realize what he said above, and just how stupid and clueless it is, though?
Arthur Sulzberger Jr., who has actually run a business, says that, eventually, the New York Times will cease to put out an actual print newspaper. I mean, this has been seen as inevitable for years, as Blodget points out. But then Blodget goes off into "stupid land."
Does he really think a print newspaper as prestigious as the New York Times will have to scale back massively in an online world? Really?
So, the Times will no longer have to build and maintain huge buildings full of state of the art printing machines. They will no longer have to buy newsprint, they will no longer have to load those papers onto huge trucks and drop them into boxes and at stores all over the city, state and country, and they will no longer have to hire people to deliver them to homes and hawk them on the street.
But they won't be able to make any money.
They will build a paywall, and find a decent price that a lot of people will pay. Instead of heading out to the front porch on a cold, snowy Sunday morning, they'll reach over to their electronic device, and the issue of the New York Times will be sitting there waiting for them. And they will be able to count the number of subscribers, they will be able to count the number of people who visit their web site for the scant amount of free content still available on their site, and they will sell advertising based on those numbers, same as they've always done.
Will a lot of small papers in small towns go belly up? Of course they will. It will be difficult for smaller news organizations to endure the transition. But a news organization like the New York Times? They can't figure out a way to make money without having to print newspapers and distribute them? Really? If they can survive the transition, which will probably take 5-10 more years, they will absolutely thrive.
I remember when I worked for a large newspaper; one that went under many years ago. And the truth is, newspapers and magazines never made money by selling the newspapers, anyway. For all intents and purposes, they gave the papers away. Even now, with the New York Times costing a dollar a day, how much of that dollar do you think the company gets to keep once they pay their distributors, pay the truck drivers, and pay for the newsprint? If they keep anything, it's no more than a nickel a copy. They make money on ads. And they will continue to make money on ads.
This is why our economy is in the toilet, folks; people like this offering "analysis" that is stupid, pointless, and which has no basis in reality. Does this guy really think that, while the New York Times was able to build a huge media conglomerate by printing newspapers to a limited local and then regional audience, will be unable to make money by pushing millions of newspapers to computers, eBook readers and iPads and similar devices? Really? What changed? Before, you could count the audience size by tracking circulation; now, with computers, it's suddenly impossible to tell WHO is reading the news from their web site?
Does anyone else see that disconnect?
Until about 10-15 years ago, newspaper ads were in boring black-and-white, and had to take up a full page. Now, an electronic newspaper can be in full color, and even present multiple pages, animation and even video. But hey; there's no way to make money from that sort of thing, is there?
And I know the Craigslist phenomenon has shot the classified industry to hell and back, but can we get real? Craigslist is a fad, and it has a high danger potential because it's free. The Times can sell classified ads cheaply just as easily as Craigslist can give them away, and they can take security precautions that can make their marketplace much safer. And because they're electronic, they can even sell classifieds all over the country and only show those of relevance to each user.
Overall, anyone who thinks a newspaper like the New York Times will have to pretty much pack it in when newspapers transition away from paper isn't really much of a thinker.