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Posts Tagged ‘New York Times’

NYTimes & iPad: A conflict of interest?

From the beginning, the relationship between The New York Times and Apple’s iPad could be characterized as cozy. However, looking back on the nuances of both Apple’s iPad marketing and the Times’ Apple coverage, one has to ask: What’s really going on here? At the very least, both companies seems to afford a number of favorable-coverage coincidences. At most, it could be a case of outright cooperation — just short of quid pro quo.

The following images were captured from www.apple.com:

On the homepage of apple.com.

Among all the rotating slides, The New York Times seems to be the only content displayed that isn’t an Apple application. Similarly, listen to this glowing review of The New York Times iPad application:

Apple seems to have been struck by Times fever, but then, Apple is a company. Companies regularly strike promotion agreements with each other. The more concerning question is: How will a purportedly independent news company deal with all this promotion?

New York Times coverage of iPad.

New York Times coverage of iPad.

Catching any bias in The Times’ coverage of the iPad takes more subtlety, and it’s difficult to tell if and when coverage might have been affected. However, there does seems to be a dearth of negativity surrounding the iPad, and surprisingly little coverage of Apple’s recent censorship of a German photographer’s website. One would think a media company looking to start a substantial distribution deal with Apple would be more concerned with the company’s stance toward censorship.

Doing the Math: NYTimes details price of publishing e-books

New York Times writer Motoko Rich did something my j-school professors nostalgically refer to as “doing the math.” Rich’s article, “Math of Publishing Meets the E-book,” lays bare the costs publishers face in the evolving world of e-book sales. The main question Rich tackles is this: do publishers save enough through eliminating printing costs to justify reducing the price of e-books? While on its face, the answer appears to be yes, Rich still reports that publishers are weary of shifting costs during the print-to-e-book transition.

Here’s the much-simplified price layout:

For an average, $26 hardcover, a retailer typically pays the publisher $13. Of this, the publisher pays:

  • $3.25 to print, store and ship the book
  • $0.80 for cover design, copy-editing and typesetting.
  • $1 for marketing (may be higher or lower depending on title)
  • $3.9o in royalties to the author (about 15%)

Out of the remaining $4.05, the publisher must pay overhead for editors, designers, office space and utilities before taking a profit. Any profit may then be used to recoup unrealized author advances.

For the e-book, Apple has agreed under the proposed “agency model” to act as a agent/retailer, taking 30% commission of the price determined by the publisher. So, for a $12.99 e-book, the publisher starts with $9.09. From this they pay:

  • $0.50 to convert text into a digital file, typeset and copy edit
  • $0.78 in marketing
  • $2.27 to $3.25 in royalties to the author (debate rages on over whether the 25% royalty should be calculated using the gross revenue or the consumer price)

This leaves $4.56 to $5.54 for the publisher before any overhead.

Doesn’t that make e-books more profitable? Maybe. This simplified snapshot leaves out revenue recouped in sales of paperbacks and shifting sales margins. Remember, e-books only make up a small percentage of publisher revenue — 3 to 5 percent — and if that begins to increase, publishers could be trapped with the printing costs of their old model and the revenue of the new, e-book model.

Where have I heard that one before? Oh yes, in newspaper industry printing costs. In the near future, publishers may face the same dilemma many newspapers are grappling with now: at what point do you stop the presses and go entirely digital?

NYTimes: Who gets the iPad — print or web?

February 17, 2010 Leave a comment
New York Times on the iPad

Can NYTimes replicate iTunes?

There’s nothing media-rumor sites hate more than blatantly generalizing people who read the New York Times (read: sarcasm). But that said, it’s long been a foregone conclusion that NYTimes readers overlap considerably with the iPad market. Thus, the Times became a major proponent of the new platform — and the potential for new subscription revenue.

However, according to reports coming out of Gawker and various other Apple-rumor sites, the print and digital newsrooms over at the Times disagree over who gets to claim this new territory. The print division calls dibs on the ground that the iPad will do nothing more than distribute the same paper format offered through physical media. It argues subscriptions should cost $20 to $30 a month — presumably equal to a print subscription — to avoid a massive exodus from the paper to the pad. (I guess we’re just ignoring that the paper is available free online until 2011 and that the iPad eliminates all printing and distribution costs?)

The digital operation has proposed a more-reasonable $10-per month subscription, and is promising interactive post-paper features regardless of the final pricing outcome.

Obvious questions aside, what seems like a prima-facie “turf war” could actually be a deep philosophical question for the future of news media on e-readers. What is the product? Is it simply another way to distribute the paper, similar enough with traditional print to justify higher pricing? Or is it something new, requiring a new pricing model and marketing focus?

My inclination — and what I suspect will be others’ as well — is to view subscription apps as something new. Fancy new distribution models for the same product won’t justify use, in my opinion.

However, as is Apple’s legacy, premium distribution and software might make a difference, e.g. iTunes. The music industry was struggling to combat illegal downloads before Apple’s music infrastructure completely reversed the trends, proving that people will pay for music downloads if it is wisely priced and convenient. Could the New York Times pull off the same thing on Apple’s new platform? I think it’s possible, but it will take precision marketing, content design, and a leap of faith.