So mission accomplished, right? Not so fast, says Felix Salmon:
Total digital subscription revenues are still going to be a drop in the bucket — if the NYT gets 500,000 digital subscribers at say $200 a year each, that’s $100 million a year, which is a lot of money in absolute terms but still just a fraction of the more than $2 billion that the NYT sees in total annual revenues. Digital advertising revenues alone are running at about $350 million a year. The subscription revenue is nice, but it’s not in and of itself going to allow the Sulzbergers to start paying themselves a dividend again.
Business owners everywhere should acquaint themselves with the term “adjusted consolidated segment operating income” (CSOI) which magically turns red ink into black by excluding marketing costs. Or as the Wall Street Journal matter-of-factly puts it:
Groupon said it generated $81.6 million in adjusted CSOI in the first quarter of 2011, though if marketing costs are taken into account that figure would be a loss of $98 million.
Always delicate, Gawker calls out Groupon for its “Bullshit Accounting” and concludes that the IPO is simply a way for the owners to cash out before the whole thing collapses:
If you look at Groupon’s accounting by generally accepted principles the online coupon firm spends $1.43 to make $1, has losses that are mounting rather than improving, and desperately needs cash from its IPO because it spent most of its last funding round on bonuses for CEO Andrew Mason and his backers.
Though the online version is lovely enough, with a snazzy navigation bar and a clean design, the print version is something of a luxury product. With Think Quarterly, Google is promoting itself not as the familiar search giant but as an elite band of thinkers and strategists who are changing how the world — and especially the advertising world — works. What Google seems to be saying with this product is that the Internet, that’s for everyone. But something special to hold, well, dear customer, that’s only for you. That may seem like a strange message coming from a company whose business is the Internet. But the Internet doesn’t pay the bills — advertisers do. Think Quarterly is Google’s love letter to them, reminding them of all the good times they’ve shared and dreaming of a future together.
Related link: Redesigning And Re-Thinking The News
To which the Columbia Journalism Review‘s Dean Starkman replied (on his Tumblr!):
I can see how Twitter may be a step short of publishing (or is it?), but Twitter’s not a like newsroom because those have four walls, while Twitter’s amplification power is potentially very large. Your “newsroom” has 25,000, sorry, *30,000*, people in it. It’s a lot closer to publishing than being in a closed news meeting. And while there was no harm done in the Piers Morgan case, it’s not at all hard to think of some harm resulting in truly stupid cases (bank runs is only one, and there are worse scenarios I can think of) if we applied your Twitter-is-a-newsroom standard.
Print advertising revenues just keep declining. Growth in digital falls well short of making up the difference, so profits are off too.