First mentioned in this blog:
The argument of which is pretty much summed up in the URL. It was then forcefully pointed out on LBO-talk that even a totally restored subscription base would be way in the red because all the print advertising revenue would be gone, which is bigger than the subscription revenue.
The new solution deals with that:
http://www.nytimes.com/2009/05/04/technology/companies/04reader.html
The idea is to develop big-screen readers that would deliver the page as is, including ads. Leaving aside that that seems like a weird approach, like saving the sailing ship by putting a fan on the back, on the surface it does seem to at least propose a solution to the ad revenue problem, whether or not it will work.
But it now turns out there is a huge hidden clawback in the form of Amazon's fees that at first sight would take away from the balance sheet as much the advertising adds:
http://www.ft.com/cms/s/0/f6f98a94-3a9e-11de-8a2d-00144feabdc0.html
May 7 2009 Financial Times
Murdoch challenges Amazon's model as newspapers trial Kindle By Kenneth Li and Andrew Edgecliffe-Johnson in New York
<snip>
The New York Times, The Boston Globe and The Washington Post yesterday announced limited tests of a new way of selling the news linked to the larger version of Amazon's e-book device, the Kindle DX. The newspapers plan to offer readers outside their home delivery areas discounts on the hardware device in exchange for longer subscription terms, modelling their partnership on the mobile phone industry's bundling of handsets and services.
<snip>
James Moroney, chief executive of the Dallas Morning News, said Amazon wanted 70 per cent of any subscription revenues his paper earned through the Kindle, and the right to republish the newspaper's stories on other portable devices.
"Is that a business model that will work for newspapers? That to me is not a model," he said.
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Awaiting round 4...
Michael