Should The New York Times Ditch Paper, Distribute Kindle E-readers?

All the news that's fit to Kindle? Silicon Alley Insider's Nicholas Carlson has done some inspired mathematical guesswork and come to the conclusion that The New York Times could save itself by ditching paper altogether.

Giving every subscriber a free Kindle e-reader, and then delivering the newspaper electronically, would be cheaper by 50% in fact.

A shocking suggestion? Not entirely, given that Michael Hirschorn's latest column in The Atlantic is predicting that the Times could be out of business by May, and New York magazine recently wrote about the "renegade cybergeeks" who are saving the paper.

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.

If the times killed its paper print-run and followed the Kindle-only model, that would leave the newspaper with $346 million in its pocket. Okay, distributing the newspaper electronically in a secure way needs some electronic infrastructure...let's stick a figure of $10 million on that. That still leaves $336 million to spare—a figure not to be sniffed at.

But Silicon Alley is wrong on some counts. Not everyone who reads the Times is a subscriber. So only a fraction of that grand total of $844 million would go on producing the paper for them. If the paper went all-Kindle for subscribers only, it would be missing out on all those who don't own an e-reader and pick up a newsstand copy on the way to work. Sure, going electronic would tempt some of those people to go buy a Kindle and then get the paper delivered over the net...but not all of them.

Then there is the ecological aspect: The environmental impact of all that paper production, ink production, powering the printing presses, the gasoline needed to deliver truckloads of the completed paper to stores. That's a powerful argument on the side of electronic newsprint.

I, for one, love the physical newspapers. There's that unique sensation of flicking through the pages, the smell of the newsprint. None of this gets replicated with an e-paper.

But the crux of Carlson's argument is a good one. In this age of eco-awareness and financial cutbacks, going electronic is actually a sensible option for a newspaper—it simply costs the company less. Carlson says he's not suggesting the NYT go ahead and do this, because forcing all its print subscribers onto Kindles would "kill ad revenues." But I suspect it won't be long before we see the headline: "The Newspaper is Dead.  Long Live the Enewspaper."

[via Silicon Alley Insider]

Add New Comment

6 Comments

  • John Qimby

    It's an interesting thought, and an interesting business plan by Amazon. However, I don't think any large paper, such as the NYT, would do this - they would be alienating their core readers who get their paper via newsprint. Even if the Times decided to go this route, they should give their readers a choice of an eReader device since the Kindle isn't the only (or IMO the best) eBook Reader on the market. Comparisons such as this article http://www.ereaderplanet.com/e... will show you that there's much better devices out there than the Kindle.

  • Scooter Alexander

    I love this idea. BUT NOT WITH KINDLE! They need to partner with Plastic Logic http://www.plasticlogic.com/ and get a much better custom screen produced. They'll be in NYC at the "Tools of Change for Publishing Conference" next week at booth #10! An order of 1 million units would drive the cost far below $359 each. And imagine what you could charge an advertiser to get a clickable, expandable ad in front of all those tech-saavy, forward-thinking (i.e wealthy) people! Then, they could team up with a magazine publisher - say Conde Nast, and throw Wired, Vanity Fair, and a few magazines on there. And finally, they could start charging other publications who wanted to offer their content on the proprietary readers. Move over iPhone!

  • Kelley Marie Mitchell

    Perhaps newspapers like the New York Times can subsidize Kindles for low or now cost to those who sign up for subscriptions much like the wireless carriers do with cell phones.

  • Margaret Becker

    As CEO of Reelcentric, the online video advertising component of many Gannett papers, I too see this system inching towards the online environment. Personally, I love the feel of a real paper, and being a native New Yorker, the Times has my heart, but as I watch my staff, many of whom are under 30, I see that I am a dying breed-so bring it on. We are ready.

  • Kit Eaton

    @Sasha: Yep, I agree. It's a question of getting used to the new tech. I read newspapers online professionally, of course--but there's something about holding a real one that exerts a powerful mental grip. And it's easier to scribble on the crossword.

  • Sasha Victor

    Good article. Keep in mind that three french newspapers have already begun e-reader trials (le monde, le figaro, les echos), yet still no success. Le monde has even manufactured its own e-reader device. I do believe e-reader adoption will come soon, but it will not be easy. Here is another good article similar in line with this: http://www.epapercentral.com/w...