The New York Times Company has done the world of journalism a great favour.
The company finally disclosed the exact revenues of its digital business.
The numbers were impressive. And they made clear that no one ever needs to fret about the future of journalism again.
Specifically, the New York Times reported that the revenue of its digital business is now about $US360 million a year.
That’s composed of about $US200 million of advertising revenue, which is basically flat, and another $US150 million of digital subscription revenue, which is growing nicely.
Assuming the digital subscription revenue continues to grow as the company rolls out new subscription products, which it will start to do next April, the New York Times Company should soon have a $US400 million digital business.
Why does that mean we never have to worry about the future of journalism again?
Because a $US400 million digital business is a healthy business, one that will support a large, talented newsroom.
Even if the New York Times’ print paper, which still generates most of the company’s overall revenue of about $US2 billion a year, were to shut down tomorrow, the company would still be able to fund an excellent newsroom.
If one assumes that a digital news business should produce at least a bit of profit–say, a 15%-20% operating profit margin–the economics of the New York Times’ digital business could look like this:
- REVENUE: $US400 million
- NEWSROOM EXPENSES: $US130 million (33% of revenue
- TECH, SALES, and MANAGEMENT EXPENSES: $US200 million (50% of revenue)
- OPERATING PROFIT: $US70 million
$US400 million of revenue and $US70 million of operating profit… that’s a nice business!
And, importantly, it’s a nice business that can comfortably fund $US130 million in annual newsgathering and production expenses.
A $US130 million annual newsroom budget could produce a hell of a lot of super high-quality digital journalism. It could support many international news bureaus, for example. And extensive national and political coverage. And war coverage. And deep investigative reporting. And video. And photography.
Specifically, a $US130 million annual newsroom budget could fund a newsroom of ~850 writers, editors, producers, videographers, and photographers who make an average of $US150,000 a year all-in (salary, bonus, benefits, office, and T&E costs).
That’s a wonderful future.
And the New York Times digital news business, of course, will be only one of many successful digital news businesses around the world.
So the future of journalism is very bright indeed.
But wait. You’re pointing out that the New York Times currently has a newsroom of 1,100 journalists?
Yes, that’s true. The New York Times’s digital news business will not support a newsroom the size of the New York Times’ current newsroom. As the New York Times’ print edition continues to shrink, therefore (and it’s shrinking at an alarming rate), the New York Times will have to continue trimming the size of its current newsroom.
But we knew that already. We have known for years that the New York Times digital business would not support the economic infrastructure of its shrinking print business. (SEE: “
Digital Journalism Secrets Revealed!“)
If you work for the New York Times print edition, and you’re worried about your future, this realisation is obviously unsettling (the print ship is sinking, and there aren’t enough digital lifeboats). But the good news is there will be plenty of other places to work. Bloomberg and Reuters, for example. Or the digital operations of TV news companies, which are still rolling in cash. And lots of digital news startups.
But the future of the New York Times print edition is a very different thing than the future of journalism, or, for that matter, the future of the New York Times.
The future of the New York Times print edition–and some of the current New York Times newsroom budget–looks dim.
But the future of journalism looks excellent.
Even today, before the New York Times has even finished rolling out its digital subscription products, the New York Times could support a digital newsroom of about 850 top-notch journalists.
So, rest assured, folks. The digital future will include boatloads of superb journalism. We never need to worry about that again.
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