Thursday, 13 November 2008

Opinion: Questioning the The New York Times business model? The NYT needs a lender to see the big picture.

That is according to Editors Weblog's simple summary of the brilliantly incisive (er?) analysis by Scholars and Rogues (full marks for spotting the obvious), and I couldn't agree more.

Problem is, for a lender to see the big picture, the NYT Company needs to present them a VERY BIG PICTURE, one full of game changing ideas and innovation, not just one that says the advertising revenue is going to crash out by the end of 2010 if we're lucky, and even then, we're still screwed.

Come on NYT: show us the picture and we'll show you the money.
Why in God's name should anyone bail out the NYT if either they are a) interested in making money (which is why I think they could be bailed by people who aren't) or b) typical investors/lenders who require something to invest in/lend to CALLED A NEW BUSINESS PLAN, because the current one is, well, crap.
It's really not that complicated: we all know advertising is tanking, that it will take till we're dead for online revenues to take up the strain and that newspaper demographics are trending into a slurry pit.
And we all know the banks are about to ask questions about the lending to which the NYT doesn't have answers without killing themselves and their staff and what essentially they are. So they just have to come up with a plan.
Easy to say isn't it?
Well, actually, yes it is. Because I and others have them. I'm not chucking them up here for free however.

It reminds me of Friedman's typically naive recent column imploring the international community to 'show Obama the money' (and troops and aid and diplomatic support etc).
As one astute IHT reader pointed out, first, on what basis should ANYONE show the US government ANY money?
Obama has to show US (that would be us, the world, not the U.S.A) the BIG PICTURE, his business plan for the world and America, just like the NYT has to show a lender some god-damn half-decent ideas about its future.
Snap to boys and girls and smell the coffee.

Opinion: Questioning the The New York Times business model?
Posted by
Rosemary D'Amour on November 12, 2008 at 4:18 PM
For over 100 years,
The New York Times has set the standard for print publications in the US and all over the world. In an article on Monday, Scholars and Rogues, a blog offering commentary and analysis on breaking news, said that the legacy could be close to its end, because the Times has "significant debt coming due, and insignificant cash on hand."Scholars and Rogues comments that the Times did not accept the Internet as an "effective colleague" to distribute news and information, regarding it as "ineffective." This has now proven "costly," as the numbers indicate.
Scholars and Rogues reports that while the Times' online readership remains high, "it's not translating into sufficient online advertising revenue." According to
Henry Blodget of the Silicon Valley Insider, based on recent NYTCo. filings with the Securities and Exchange Commission, the Times owes $453 million more than it has. The Times' business model, which has been applied by many publications, is "faltering." It faces the problem that every other newspaper in the United States faces - how to make online adverting pay off fast enough to keep up with costs. According to Scholars and Rogues, "Internet ad revenues, though increasing, will not produce sufficient revenue soon enough to stave off drastic, perhaps catastrophic, changes in the newspaper industry."So the question is, what can the NYT do to cut costs and remain afloat? Will cutting jobs be enough? Will they need to end print editions? An interesting point, "any change in the Times company's business model will influence the readership habits and information needs and wants of millions of people." Keeping this in mind, they will need to find a solution that both allows them to maintain their status and have the resources to provide quality news coverage.

P.S If you were on the ball today you could have had yourself some NYT Company action for as little as $7.33. Currently trading, as of about 20 minutes ago, at $7.57. That's nearly 46% down over 3 months.
$7 here we come and half the value of the world's largest economy's No. 1 newspaper site blown away in 3 months. Oh yeah, there's a future on the Internet for quality content providers. Just not much money.
This year is like watching the Berlin Wall coming down.

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