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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]