Peter Kafka

Recent Posts by Peter Kafka

The New York Times Reports a Digital Success Story

The New York Times’ pay wall, long debated in and outside of the company, now looks like a bona fide success.

The company has more than 530,000 paying subscribers for its digital editions, and it credits the plan with a consistent increase in circulation dollars. Which it needs, because its ad dollars continue to shrink.

Here’s another data point in favor of the plan: A report from Barclays analyst Kannan Venkateshwar, who estimates that the paper will have more digital subscribers than print subs within a couple of years.

The caveats: Even if Venkateshwar’s projections are right, the digital subscription story won’t solve all of the Times’ problems. For starters, each digital customer generates much less revenue than a print customer: The digital sub pays around $220 a year for the Times, versus approximately $730 for the paper-and-ink version.

And while the profits that each kind of sub generates for the paper should be roughly equal — because it’s a whole lot cheaper to produce and deliver a digital copy than a print one — that only holds true if the Times isn’t overly reliant on discounts to sell its digital subscriptions.

Still, Venkateshwar, who has been bullish on the Times for a while, argues that most of the digital subscribers to date seem to be new customers. So all of this is incremental revenue. That’s a best-case scenario for the paper.

 


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik