Who's Going to Pay the Journalists?

Guy Delivering Papers in the Snow

I hear that question a lot. As the mean-spirited bloggers steal audience from traditional publications, and as audiences migrate from reading publications printed on paper to reading them online (where the ad rates are lower), what’s going to happen to the Fourth Estate? Who’s going to pay for investigative reporting??

Seth Godin reminds us that the journalists and photographers aren’t the expensive part of running a newspaper or magazine:

“A magazine with a million subscribers might spend more than a million dollars to deliver a single issue to its subscribers. A million dollars spent on postage, printing, subscription sales, fulfillment, ad sales, sub rights and more. I wouldn’t be surprised if the freelance budget for the writers and photographers (the real reason people read the magazine) is less than 15% of the cost, perhaps a lot less.

“The economics of this business are interesting. Millions spent, millions earned, and almost all of it goes to pay for the paper and the friction it brings.”

So let’s ask different questions. Who’s going to pay for the paper? Who’s going to pay for our collections department? Who’s going to pay our enormous gasoline bill to fill up those delivery trucks? Or even, who’s going to sell the ads?

Two good things happen. One, the discussion is immediately less hostile: Reading news on the internet doesn’t mean you hate democracy. Two, solving the business problem gets easier. Is your ad sales team inefficient? OK, outsource to Google or Federated Media. Is your accounting group costing too much? Maybe software and offshore partners can streamline your approach. Paper, ink and delivery costs decimating your profits? Check out the Internet and the iPad.

  1. # The iPad Might Save Newspapers, But Salvation Will Be Expensive said: September 15th, 2010 at 10:49 am

    [...] function usually represents less than a quarter of the total expense budget. Same is true for newspapers. Outsourcing 75% of the costs in exchange for 30-40% of the revenues — that has to increase [...]

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