by Emily W. Sussman
Reacting (as many bloggers did) to Michael Hirschorn’s apocalyptic scenario for the New York Times in the Atlantic, former stock analyst and Internet publisher Henry Blodget proposed a three-pronged plan last week to save the paper. “Current management doesn’t seem to have one,” says Blodget. “So it’s up to us.” Here’s his strategy:
1) Cut overall costs by 40 percent by 2010.
HOW: Reduce the number of editors. Fire reporters for not being “productive” enough, as quantified by page hits. Shut down bureaus. Shutter non-essential sections of the paper. Consolidate newsrooms.
2) Make its print product profitable.
HOW: Charge the most loyal print supporters more and more for their subscriptions as paid circulation drops.
3) Collect online subscription revenue.
HOW: Print subscribers prove that there are readers who will pay for content. Create a hybrid paid/unpaid online model like the WSJ’s. Accept that 90 percent will abandon the site, but the remaining 10 percent will consist of a highly desirable demographic group; charge more for advertisers to reach that group. Allow bloggers and other sites to purchase a redistribution-enabled subscription to ensure that NYT is part of the broader web conversation and stays relevant.
BLODGET’S CONCLUSION: A combination of cost-cutting, plus revenue gains from online subscriptions, print subscriptions, and higher CPM rates, would rescue the site financially.
Blodget’s plan didn’t go over very well—either with his readers or with Condé Nast Portfolio blogger Felix Salmon. Salmon’s comprehensive criticism encompassed a lot of Blodget’s errors as alleged by bloggers and commenters, so it’s worth summarizing here as well.
Salmon on COST CUTTING:
- NYT’s reputation for credibility and accountability depends on its editors, and cutting back on them would have dire implications.
- Writers’ value can’t be quantified by their average number of reader clicks. On that scale, investigative reporters, who publish extremely valuable stories less frequently, wouldn’t carry their weight.
- “Fluffy” sections, while not necessarily newsworthy, should not be cut because they are usually the most profitable.
Salmon on MAKING PRINT PROFITABLE
- The print and distribution revenue model (i.e., the news-to-readers model, as opposed to ads-to-readers model) has never been profitable. Why institute it now?
- Print circulation would fall precipitously with a profit-minded, increasing price point, which would end up being astronomical.
Salmon on ONLINE SUBSCRIPTIONS
- Readers who pay for print subscriptions aren’t necessarily buying it for content; they also want its portability, etc. So it doesn’t follow that people who pay for the print version will convert to online.
- People don’t understand paid firewalls, and they stay away from confusing interfaces.
- Firewalls are a crippling point, and “if you cripple your website, people will just go elsewhere.”
- Issue goes beyond making up revenue from lost advertising: if it charged for content, the paper would lose “goodwill value.”