Tuesday, August 16, 2011


I'll save those who might point to evidence against some of my positions the trouble by pointing to the evidence myself:
  • I've used the comparison between libraries and Starbucks several times. According to Jim Romenesko via Gawker and Yves Smith we learn that Starbucks is succeeding so well that the students and other "laptop hobos" are driving out people who want to drink coffee. So maybe I was wrong and libraries are showing how hard it is to compete with free.
  • On the other hand, I have been very skeptical of the New York Times' paywall. In the Columbia Journalism Review Felix Salmon points to Seth Mnookin reporting on the first 4 months of the paywall.
    its digital-subscription plan has thus far been an enormous success. The ... the goal was to amass 300,000 online subscribers within a year of launch. On Thursday, the company announced that after just four months, 224,000 users were paying for access to the paper’s website. Combined with the 57,000 Kindle and Nook readers who were paying for subscriptions and the roughly 100,000 users whose digital access was sponsored by Ford’s Lincoln division, that meant the paper had monetized close to 400,000 online users. (Another 756,000 print subscribers have registered their accounts on the Times’ website.)
    Clearly that is encouraging, and Salmon goes on to point out that:
    Those paying digital subscribers, however, are much more valuable than their subscription streams alone would suggest. They’re hugely loyal, they read loads of stories, they’re well-heeled, and advertisers will pay a premium to reach them. ... it seems as though total digital ad revenues are going up, not down, as subscriptions get introduced: the holy grail of paywalls.
    However, this is only one digital subscriber for every two paper subscribers, and the NYT is making much less from each digital subscriber even after advertising revenue, so I'm sticking to my position.
  • I have been skeptical of the long-term prospects of large publishers such as Elsevier, although I was careful to note my track record of being right way too soon. In the short term, Elsevier's parent Reed Elsevier recently turned in modestly better resultsfor the first half of 2011. Its stock has been performing roughly in line with the S&P500. I still believe that the scope for Elsevier to acquire large numbers of lucrative new customers is limited, and their ability to squeeze more income from the existing customers is obviously limited by research and teaching budgets.

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