I calculate that the NYT’s paywall has pushed that paper past a critical milestone: Its total digital revenue more than covers the cost of its entire newsroom. That’s not good enough, obviously. News organizations have significant overhead costs like real estate, travel, and ad sales. But the paper’s 800,000 or so print subscribers paying $800 a year for the paper are a rich future source of digital subscriptions, and a good portion of its print advertisers would presumably make the transition with readers to an all-digital platform. Papers need new revenue streams to supplement ads and circulation, and they need investment to find them.
I totally agree that the WaPo must transform to survive. The question, of course, is how should it transform? More precisely: How can it do so while preserving what has made it great?
These are extremely difficult questions, but they’re made that much more so by the Post’s myopic insistence on handing more than a billion dollars to shareholders at a time of crisis.
Just keep in mind that Clay Shirky's incentive is to promote Clay Shirky, not to solve your problems (If he did he'd be out of a gig). He dances around the edges, trying to imply that he has an answer without actually giving anything away. For that you need to read his book, hire him, etc. He's not unique, it's the same with any pundit since Rasputin's time.
Ryan, if you or Mr. Shirkey had your kids' college fund in WaPo stock you'd be clamoring for it back too. It's easy to point fingers when it's not your money.
#1 Posted by JLD, CJR on Fri 1 Jun 2012 at 11:46 PM
Ryan makes a career out of bitching about what other people do with their own money.
#2 Posted by padikiller, CJR on Sat 2 Jun 2012 at 10:50 AM
Let us know what your career is sometime, padi.
#3 Posted by Thimbles, CJR on Sat 2 Jun 2012 at 02:12 PM
'It will also require the Post Company to stop forking out hundreds of millions of dollars a year to shareholders and to invest at least some of that money in its news operations.'
Isn't it ... you know...THEIR MONEY.
#4 Posted by Patrick R. Sullivan, CJR on Sat 2 Jun 2012 at 02:27 PM
Keeping WaPo's cash in-house for investing in its journalism products and to pay down debt are vastly smarter strategies than to toss the money out the door in stock buybacks. Stock buybacks don't benefit either the business or the average stockholders -- the worst of all possible worlds.
#5 Posted by Carl Olson, CJR on Sat 2 Jun 2012 at 02:31 PM
In an effort to aid newcomers in understanding this new school of economics (Thimbilistic Chittumism), here's a primer:
1. It is just and natural for blue-collar workers to demand the highest wages possible. It is unjust and criminal for executives to demand the highest salaries possible. It is just and natural for customers to demand the lowest prices possible. It is unjust and criminal for a company to demand lower prices from suppliers.
Most importantly, it is unjust and criminal for investors to demand the highest possible returns on their investments. This is "corporate greed". (Thimbilistic Chittumism, being a nascent doctrine, is presently unable to address more complicated scenarios - like "what if the employees are also owners?" or "what if the customers are also owners?". Fortunately, what Thimbilistic Chittumism lacks in academic rigor or basis, it gains in amplitude and repetition in debate)
2. If a company makes money, a crime occurred. If a company loses money, a crime occurred. If a company exists, a crime is occurring (unless the company is Solyndra or some other company tied to Obama).
3. The proper role of government is to hinder business, because doing business is tantamount to engaging in criminal activity.
4. The government can do business better than the private sector can.
5. The average American is stupid. REALLY stupid. Far, far too stupid to be permitted to even buy a used car, sign a mortgage, shop for health insurance or fill out a state income tax form without the Gubmint supervising him. Nonetheless, all of these stupid rubes for some reason deserve more power in government and business.
6. If an investor wishes to bail out a troubled company, then the investor should cut a check, walk away and die. The investor should not seek repayment. The money should be used to prop up union pension funds.
7. When you discuss "income inequality" you avoid any mention of work. Specifically, you do NOT mention the fact that adult workers in the top quintile of households by income work nearly TWELVE times as many hours as adults in the bottom quintile of households. You must respond to anyone who suggests the existence of any relationship between work and income with invective and ad hominem.
8. When you discuss taxation, you ONLY discuss payroll taxes and you NEVER mention benefit payments or tax credits for low-income citizens.
#6 Posted by padikiller, CJR on Sat 2 Jun 2012 at 02:52 PM
It is not inevitable that all daily newspapers will be "screwed," i.e. that they will go out of business as the shift to digital delivery continues. Look at the digital photography/reproduction field: Canon USA Inc. is often thought of as some kind of new economy innovation leader, and it is -- but people tend not to realize that Canon started in 1955. Of course, the Kodaks and Polaroids didn't handle the digital-imaging shift so well, but that is exactly my point. Newspapers that were dominant in their markets can survive if they pay attention to detail, use their money wisely, and plan for the long-term -- even as they develop the ability to innovate quickly as circumstances change. Newspapers that don't do these things will be "screwed" and die. I agree with Ryan; when the WP pays off the relatives with stock buybacks and dividends, it is marching resolutely on the path to screwed oblivion. The family should invest in its primary product or put the paper on the market.
#7 Posted by John Mecklin, CJR on Sat 2 Jun 2012 at 03:03 PM
A $1.1 billion 4-year return is amazing, given a market cap of roughly twice that.
If I were a shareholder, I'd like nothing better than to see the WaPo spin off the paper and focus on service.
Dead tree journalism is done. The content can be written by anyone who can type at an eighth grade reading level and published by anyone who has a computer or an iPad.
There's just too much competition for newsgathering and analysis and too many people are doing it for free, many of them well. And, of course, the cost of publishing has evaporated. A news operation can be had in a basement through a DSL line and an HD camcorder comes with every phone.
You can't compete against volunteers..
#8 Posted by padikiller, CJR on Sat 2 Jun 2012 at 03:47 PM
@padikiller: Dana Priest and a panoply of other extremely talented journalists at the Washington Post certainly can compete against volunteers, because they are professionals who produce high-impact, important, interesting stories that -- hate to break the news to you padi -- volunteers simply cannot. The question is whether the Washington Post will invest in the technological and business side innovations needed to support the kind of journalism that amateurs are unable to accomplish.
#9 Posted by John Mecklin, CJR on Sun 3 Jun 2012 at 10:11 PM
@John Mecklin
The distinction between "professional" and "amateur" journalists is artificial and false.
Being a professional is like being pregnant. You either are, or you aren't.
Plumbers are professionals. They have a proven minimum competency and are licensed. Lawyers and doctors are professionals. So are barbers.
"Journalists"? You can't even define the term, much less claim any threshold competency or other qualification. Anybody who can type (or take a cell phone video) can be a "journalist", though some people are certainly better at it than others.
As to the substance of your argument, the web is awash with very smart people giving away quality content, whether or not they meet your arbitrary and capricious definition of "professional journalists".
Is Charles Johnson at littllegreenfootballs.com a "journalist"? He sure as Hell took down Dan Rather and he loads the web with free content.
What about our Dartmouth boys at Powerline? Are they "journalists"?
Dead tree journalism cannot compete with the digital new age.
We don't need 60 union pressmen and a roll paper storage warehouse to get the news to the iPads. We don't need paste-up and litho. We don't need fulfillment.
We need a reporter, an editor and a DSL line. PERIOD.
This is just the reality. You guys in the "professional journalism" trade are to 2012 what TV repairmen were to 1977. That's just how it is.
#10 Posted by padikiller, CJR on Mon 4 Jun 2012 at 11:25 AM
'...to support the kind of journalism that amateurs are unable to accomplish.'
Such as Bill Clinton's relationship with an intern, and her blue dress? Paul Krugman's ridiculous factual errors published in the NY Times, which include believing as late as the summer of 2008 that Fannie and Freddie were barred by law from buying sub-prime mortgages, that George W. Bush has been given some kind of sweetheart deal in the purchase and sale of the Texas Rangers, that Army Sec'y Thomas White had engaged in massive securities fraud (which even his editors came to realize was untrue)?
George W. Bush was AWOL?
That Barack Obama's green-eyed, dark-haired white girlfriend's family lived on an estate (according to Dreams of My Father) that exactly fits the description of the Oughton's of Illinois (Bill Ayers late girlfriend, Diana, of the Greenwich Village townhouse bombing)?
That there was no famine in the Soviet Union in the 1930s? That General Motors destroyed America's streetcar systems in order to make people buy more cars? That Alger Hiss was innocent?
That the Banking Act of 1933 (aka, Glass-Steagall) has been repealed?
Where, oh where would we be without the pros.
#11 Posted by Patrick R. Sullivan, CJR on Mon 4 Jun 2012 at 12:12 PM
Wait, Glass-Steagall was not repealed? Better go arrest Bob Rubin for fraud.
You can leave Sandy alone. His frauds are OK.
#12 Posted by Edward Ericson Jr., CJR on Tue 5 Jun 2012 at 02:29 PM