Can Jason Save the Newspapers?

by Steve Roth on February 16, 2009

Photo from FlickR

I was chatting with Jason the other day and he mentioned an interesting notion he had of providing condensed versions of a newspaper or newspapers designed specifically for 8.5×11 printing, emailed as a PDF each night. (Maybe including some method for auto-printing so it’s waiting on your printer when you’ve got your coffee ready.)

I liked the notion, mainly because it reminded me of the fax version of the NYT that I remembered reading at a somewhat remote Hawaii resort years back. I really loved it–like the International Herald Tribune but pared down even more. It was eight or ten pages, and included top articles from the various sections, including OpEds (and–crucially–the crossword puzzle).

It was just the amount of NYT I wanted on vacation, and just the amount that most people have time and inclination for on a busy working day.

It’s now called Times Digest (sample PDF), and obviously it’s not (just) about fax any more. Sez the Times:

The publication reaches over 125,000 readers daily … Among the 400 subscribers around the globe are hotels and resorts, corporations and organizations, cruise ships and yachts, and United States Navy ships.

Institutional subscribers pay for rights to reproduce a given number of copies. Two key facts to note: News articles are edited for length (though OpEds aren’t, for obvious reasons). And there’s no advertising.


So I pointed out to Jason that the Times already has such a thing, and any other paper could create one pretty easily. There’s no real third-party business model there, lying around waiting to be launched.

But it got me thinking: is there some kind of business model there for newspaper publishers?

Why do I care? Like many others, I’m rather frantic to see some way of saving those fantastically expensive news-gathering operations. (And not only because I and the rest of the blogosphere rely on them so desperately for actual factual content to discuss and link to).

And for purely selfish reasons, I also want someone to figure out how to save the printed New York Times. I’ve been reading it daily for thirty years, but my fondness is not just dewy-eyed nostalgia. That expertly laid-out and edited, brilliantly browseable/scannable/skimmable 17-by-22-inch, ultra-high-resolution display–which rolls up and fits in my pocket without concern for damage–is not going to be matched in electronic form any time soon, if ever.

For me, the whole cohesive package of content, design, and format is far superior to what any electronic device can deliver, given those devices’ inevitably tiny display windows (tiny, at least, compared to a double-truck newspaper spread).

So does this digest idea have any large-scale potential? Could it contribute to a business model (think: revenues and profits) that might help support major-league worldwide news-gathering–and maybe even traditional printed newspapers?

For instance: suppose the Times offered to deliver this digest to subscribers on the subscribers’ chosen days, in lieu of delivering the whole physical megilla. (Their delivery systems are already set up for this; you can stop delivery for a specified string of days when you’re on vacation, for instance.) It seems sensible–they get the same subscription fee, but the cost of delivering the digest is basically zero. What’s not to like?

That got me digging into the numbers, because that’s where God is.

The Times prints about 400 million individual copies of the paper a year. (All these numbers are estimates, but they’re based on published info and are right in the ballpark.)

Annual ad revenues are $1 billion. Some portion of that is digital advertising–they don’t break it out–so let’s be generous to digital and assume $700 million in print advertising.

So each copy represents $1.75 in print-advertising revenue. (Those big branding display ads with no click-through accountability are really wonderfully filthy lucre…)

Now suppose they offer subscribers the digest, advertising-free, instead of the full printed edition avec les advertisements. How much would they save?

I checked with a friend who’s the publisher (from a family of newspaper publishers) of a 50,000-circulation small-city newspaper. (Let’s call him Albert; for obvious reasons he didn’t want me to publish identifiably proprietary numbers.) The answer can get complicated, of course–there are fixed, semi-fixed, and variable costs, so cost per copy varies a lot depending on how many copies you’re printing and distributing, and the number of pages per copy.

Short story, Albert’s incremental printing and delivery cost per subscriber copy is about 34 cents (14 cents in newsprint and ink, 20 cents for delivery). Albert figures the Times prints about 25% more pages per copy than he does, so let’s put the Times‘ print-and-deliver cost per copy at about 38 cents.

Which makes the problem pretty clear: The $700 million in ad revenue is dependent on circulation. (Ad rates are somewhat loosely but still fundamentally linked to cost-per-thousand, or CPM.) If 100,000 of the Times‘ subscribers opt for the ad-free digest on a given day, the Times saves $38,000, and sacrifices $175,000 in ad revenue, for a $137,000 loss. Not a profit deal.

Albert agrees:

Q. Holding up your thumb and squinting, do you think my friend’s notion
has any legs at all as a business-model tweak for newspapers?

A. Not unless he develops an advertising model.

Now they could presumably put some ads in the digest, though they’d be pushing against the page-count limit that’s sort of the thing’s sine qua non. (They’d essentially be turning it back into a newspaper, ink-jet printed by each subscriber at a high per-copy cost that I won’t even discuss here.) But assuming you could find some space, how do the numbers sort out?

You need to pick up $1.37 in ad revenues per copy. That’s $1,370 per thousand.

The Times currently charges about $15.72 per thousand for an ad, and industry rates range from $11.19 to $24.62, according to The Washington Post. (“based on a 31.5 column inch ad at the annual agreement rate requiring the lowest dollar or linage commitment.”) They’d need something like 50 ads per issue in the digest, at $2,750 per ad, just to break even.

So much for that idea.

Instead, the Times charges $360 a year for an individual Digest subscription. (Print subscribers take note: it’s free for you.) That yields them about a dollar an issue in almost pure profit, and it’s coming from people who don’t otherwise subscribe. They’re additional subscribers. This leads me to believe that the folks at the Times have already done this arithmetic. Ya think?

Bottom line? No: Jason hasn’t saved the newspapers. Damn.

The photo at the top of the post is a CC-licensed image from FlickR.

Steve Roth has been working in publishing–mostly books and magazines, but with some daily and weekly work–since the early 80s (writer, editor, packager, publisher, sundry and various other). He’s been an equity partner and/or principal in several publishing startups (all successful, believe it or not).

For ten years he was business partner with Steve Broback, who’s now Jason’s boss at Parnassus Group. Roth’s opinions (decidedly pinko by Joe-the-Plumber standards, but Steve has data to back them up) are on display at his blog, The True Conservative. You can also experience his Hamlet obsession, at


1 Jason Preston 02.16.09 at 6:02 pm

Steve – I’m totally in agreement with you that this is not a miracle out for papers across the country – with a per-issue print & distribution cost well under one dollar, how could a paper really hope to make an improvement by offloading that cost at the expense of the size and package of a full paper?

Instead, this makes a whole lot of sense if you look at from a different perspective. Start from the premise that print dailies can no longer bring in the kind of revenue to support the historical size of those institutions.

Suppose that most, if not all, daily papers are on an inevitable track to abandoning the medium, since at a certain point the subscriber base will fall below a point at which they can really benefit from economies of scale (I think this is true).

So now we have an online-only newspaper.

OK. They could, of course, charge for the fax edition like the NYT does, or they could offer it for free to anyone who wants it. I’m assuming that the number of people who would take a free version is vastly larger than the paid audience, and if the ONLY people paying were the “fax” subscribers, some of them may start to feel had…

So it makes more sense to offer a free “print” edition that offloads the cost of printing. Again, this becomes “bonus” revenue for the paper.

Let’s further assume they can fit an average of 1.5 ads per page for the low end of your given CPM: $12. Now those 100,000 subscribers don’t look so shabby anymore: each ad earns $18k, at 18 pages (12 x 1.5), they get an additional $324k every day for…a program that takes a day or two for an engineer to make.

I don’t think any news organization is going to be able to pull in monopoly revenues in an open market. That’s a foregone conclusion, but I think that a bolt-on 8.5-inch edition could help retain readers through the paper-to-online only transition and bring in some tidy revenue in the process.

2 Zac Casey 02.16.09 at 6:25 pm

I’m someone who has a conflicting print / web conundrum. I’m an educational researcher who loves books for their aesthetic, as well as the ability to write in the margins, put sticky notes in, dog ear pages, etc. No matter the interface, nothing online will match the aesthetic of holding a printed form of media.

However, I love my kindle, and the feature to have papers like NYT delivered to me automatically in a searchable kindle format is pretty sweet. $13.99 a month is significantly more expensive than the format you detail above, but this has the whole paper at your disposal, or at least you could potentially have it based on what you want to read.

The thing is, when I want to read the news I go online. I carry an iphone, so I google something when I want to know something right then and there. I love NYT, their coverage on education, the op-ed’s, etc. The thing is, I have never bought a print copy of the NYT, and I read at least one article from them every day. Papers like the NYT have to find new and innovative ways to make money off of people like me, who read their work everyday and have never paid to.

3 Steve Roth 02.16.09 at 8:19 pm

Bear in mind: those rates are for 31 column inches–70 square inches, like a 7×10 ad. You’re talking little spot ads, I assume.

I just googled up the rate card for a 100,000-circulation mag–Las Vegan (I’m pretty sure it has nothing at all to do with tofu diets.)

Full Page $3,995.00 ($40 CPM)
2/3 Page $2,925.00
1/2 Page $2,195.00
1/3 Page $1,475.00
1/4 Page $1,095.00
1/6 Page $735.00
1/12 Page $355.00

At those rates, 18 small ads would yield $10 or $20k…

I’d really like to know: what does the NYT spend annually on editorial? How about for the three core everyday sections: First, Business, and Arts? I can only imagine it’s a shitload.

4 Steve Roth 02.16.09 at 8:25 pm

Oh, and you’ve seen this, right?

Be interesting to see how they do. First issues seem like they have lots of sexy talk and barely-clothed women, so it should take off!

5 Jason Preston 02.17.09 at 12:00 am

Zac – I agree, newspapers talk a lot about how their audience is expanding, but it’s expanding into people like you, that don’t have a lot of brand loyalty (like Roth) and don’t pay (like classic subscribers).

But Roth is right that the real money has always been in advertising, and ad dollars have always been inflated thanks to a relative monopoly. I don’t have the answer to that one (yet).

Steve – still worth doing though, right? 😉

6 Jason Preston 02.17.09 at 10:49 am

Also, Steve – I’ve seen The Printed Blog a couple of times (and it’s an idea I’ve had myself, actually). It will probably work, but it’s not a newspaper.

The business model only works because it’s the Google model – you serve ads against content that you don’t have to bear the cost of producing.

The one potential problem is he’s assuming that other businesses will continue to bear that cost as well, and I think that sooner or later someone needs to cut a check. But I could (and should) probably make this a post in and of itself.

7 Steve Roth 02.17.09 at 12:13 pm

Printed Blog. I totally agree with you. The only way to get top-notch reporting is to pay for it (plus expenses, travel budgets, editorial support, etc.). Hobbyists will never deliver what the NYT does.

Digest. Absolutely seems worth doing for newspapers, but only if people will pay for it. And adding some ads seems smart. That seem right to you?

8 Dan Pacheco 02.18.09 at 3:01 pm

Very intersting idea — and one I have thought of as well. In fact, we will be launching a service that does exactly this in just a few weeks. It’s called Printcasting: People-Powered Magazines. You can see a video of our closed beta at, and register to beta test as well.

One big difference between Printcasting, this New York Times prouct and single publications like The Printed Blog is that we’re going to make it possible for *anyone* to create their own 8.5×11 magazine, newspaper, etc. using content they own the rights to, or content from participating publishers and bloggers. It’s more like citizen publishing or, if you will, terrestrial blogging than it is the personalized newspaper. However, it could be used to power personalized newspapers, and probably will. A publisher could also register as a contributor.

We will also be sharing ad revenue with participating bloggers, who we call “Contributors” in our system. That won’t happen immediately because we’ll be making self-serve ads free for the first couple months in order to drive adoption by local businesses. But by June we will have revenue coming into the system, and by August we will make the first payments to participating contributors. Publishers of Printcasts will get most of the ad revenue, and we’re hoping to be able to pay them immediately after the ad is paid for — although as you can imagine there’s a lot of complexity behind making that happen with e-commerce gateways.

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