Nicholas Carlson writing at Silicon Alley Insider asks whether the New York Times would be better off giving all subscribers an Amazon Kindle to receive the newspaper electronically rather than a print edition. Fast Company picked up the story and summarised the numbers:
And then there’s the math: From the NYT’s financial report, production costs in terms of raw materials and wages/benefits tally around $844 million a year. Carlson has info suggesting the newsroom costs total around $200 million a year, meaning it costs some $644 million to print and distribute the physical newspaper.
The Times reportedly has 830,000 subscribers. A Kindle costs $359. Thus distributing a free Kindle to each subscriber would cost about $298 million.
This example illustrates the perfect storm scenario for Australian newsagents who handle newspaper home delivery. Not that a publisher would give away the Kindle (it does not work here in Australia anyway) but rather that the numbers for a completely different distribution channel are so compelling.
The maths is pretty flawed. They derive a figure for the total printing costs and then compare that to a figure to supply kindles to subscribers only, and only those who are ‘loyal’ (subscribed over two years).
Add in any extra service charges that exist to distibute digitally through the kindle network and it doesn’t compare as favourably as surmised.
Its not that I don’t see the challenge coming in the future, but articles such as these aren’t the heralds of doom.