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Felix Salmon: ‘Online subscription revenues won’t make newspapers profitable again’

January 22nd, 2010Posted by in Editors' pick, Newspapers

Felix Salmon responds to John Gapper’s Financial Times column Charge for news or bleed red ink, in which Gapper suggests that while only a small number of New York Times readers may sign up for subscriptions under its forthcoming charging model, this would provide a significant revenue boost.

Salmon goes ‘through the numbers’ and writes:

With the New York Times Company making the best part of $300 million a year from online advertising, it’s hard to see that the extra revenue boost would really be worth it.

The point here is that with the powerhouse NYTimes.com site front and center, the New York Times Company as a whole is a major online media player, serving up billions of high-prestige page views and building strong relationships with every major online advertiser and media buyer in the country. Even under the most optimistic scenario, a majority of the NYT’s loyal readers will desert it when it moves to a paywall. And with those readers gone, media buyers are by no means guaranteed to stick around.

Full story at this link….

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