Well that’s the thing - in general magazine subscriptions have always been remarkably cheap to get large subscriber bases that can look at ads. I mean, through Amazon I’ve subscribed to Entertainment Weekly for a while - got one year for $15, and now it’s just $25/year. That’s less than 50 cents per issue, all things considered. That wouldn’t even cover their printing and shipping charges.
I could easily swallow paying the same or even upwards of a dollar per issue digitally. And without the need for EW to print and mail out physical copies, that would be money directly in their pocket instead.
The New York Times had upwards of 2 billion dollars in raw operating costs last year, not counting interest on debt, taxes on assets, and a few other assorted financial buzzkills.
Assuming that they could pull even half of their funding from online advertising revenues (and let’s face it, $1 billion isn’t a number lots of companies operating online get to throw around very much), they’d still need to sell 2,740,000 copies of each and every issue at a buck a pop (more like $1.20 or $1.15, really, to account for credit card processing fees and various hanger-on entities in the online purchasing world) to keep their heads above water with continuing capital investments and such to cover the extras. If and when loans come due, they’d need to have had a year of 3,000,000-sales-a-day issues to reasonably stay afloat.
Considering that in mid-2011, the NYT was only reporting a 915,000-copy circulation (and remember that not all copies “in circulation” are actually paid for or are bought at considerably reduced rates), I don’t know how realistic those figures are. Tripling their readership overnight via a better online/tablet presence probably isn’t feasible.
And again, all of that’s assuming they somehow pulled $1bil out of online advertising out of their ass if/when the paper edition flopped entirely. Considering 2011 ad revenues were in the hundreds-of-millions range ($300mil, give or take, from what I’ve read), I don’t see it happening.
AKA - Print is dead. The newspapers are getting hit hardest given the sheer cost of producing something decent everyday, but given that magazines have to face lower potential revenue (fewer separate issues to sell in any given time period than a daily newspaper), it’s not like they’re any safer. Maintaining a journalism company on subscribers/issue sales alone just can’t happen without a massive restructuring of how these companies are run to drastically cut costs.
It’s more established with decades of extra research tying it to increased sales, social presence, and brain real estate. Moreover, it skews toward older and wealthier folk (more apt to purchase) and has been artificially maintained by the print industry to some extent (who, despite devastating circulation losses still claim that they’re relevant–more and more advertisers are wising up, though, leading to the current crisis, by and large).
Online, you’re getting ephemeral impressions that last fractions of a second on the users who don’t ad-block you or access the materials from a region in which you don’t do business. It’s a newer, younger industry hungry for growth and riddled with still-immature business practices–everyone wants everything to be free all the time forever and they’re willing to take any funding at all to make that happen. Simply put, fresh-out-of-college startup funders aren’t necessarily hitting the negotiating table as hard as the Salzbergers were 20 years ago, and even if they do, they don’t have the data, history, or (usually) social pull to make it stick.
It’s not to say that revenues won’t rise as companies are forced to put more stock into online advertising (since that’ll be the only way they can reliably reach the vast majority of the populace), but it’s still a long way’s off and growth hasn’t exactly been meteoric: a 5% or 6% year-over-year growth in online revenue doesn’t mean a lot if the original hard dollar value was 1/10 of the print revenue figure to begin with.
