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How to Save The New York Times, Let’s Buy the Newsroom

On The New York Times op-ed pages yesterday there was an opinion piece about setting up a $5 billion endowment to perpetually provide the Times with a $200 million annual payout to support the newsroom. I have a better idea.

Right now the Times has approximately a circulation of about 1 million. To have it delivered can cost a subscriber as much as $600 a year.  What if The New York Times said we want to put the newsroom into a cooperative trust owned by its readers as it eases into the online world.

We own the newsroom, the New York Times owns everything else and the governance for the newsroom would remain much the way it has been in the past.

If everyone who subscribes to the New York Times paid $400 a year, just for it online, but also got shares into the cooperative, that would be $400 million a year. The Times newsroom costs about $200 million a year to operate. The extra $200 would go into an endowment, so in five years there would be a billion dollars, in ten years $2 billion. Enough that the subscription rate would go down for anyone who contributed for ten years. A ten year investment would be $4,000 or $2,000 less that what you pay for the newspaper now.

It would be like owning the Green Bay Packers, but it would be owning The New York Times’s newsroom. The larger company could do whatever it wants on the business side, but we would all own the newsroom and demand high quality news. Perhaps we would work out a deal that a certain percentage of the business side profits would go into the news endowment. Of course, the cooperative trust would be set up in a way that the Sam Zells of the world could never intrude.

Would I sign up, if asked today? Yes. Of course, the real test is — Would you?

26 Responses to “How to Save The New York Times, Let’s Buy the Newsroom”

  1. Peg Achterman Says:

    Yes – sure would, but an even bigger issue to me is the survival of my local papers (Seattle PI & Times). I trust the NYT and Christian Science Monitor, WPost and WSJ would bring me what I want on a national/international scale. I worry about the watchdogs here in my state — looking hard at the legislature, county and city councils, etc. Historically my subscription has been less than the news stand price, but even at that price the year would only be about $400 or so. I give that much to my public radio station every year! Time for local papers to figure out a way to do an endowment too.

  2. Leonard Witt Says:

    Hi Peg:

    Let’s do the Seattle Times numbers, daily circulation 343,356. How about $2 a week per household to own that newsroom. Just the newsroom, they keep the rest of the business. That’s $100 x 343,356 = $34 million dollars a year. The Christian Science Monitor figures it can run an online newsroom operation with 80 reporters for $ 7 million a year. That means in Seattle you could own a newsroom with 240 reporters, plus have $13 million a year extra to pack into an endowment annually. I mean this is too good an idea. Call the Times & PI now and tell them you and your 300,000 other friends will buy it within a month. Imagine owning one of the finer newsrooms in the world. What else do you own that’s worth as much as that? All that for $2 a week. Who would not invest?

  3. Steve Says:

    This is a great idea and I would support it in principle, but the question remains as to who would administer the transition into a trust and manage the endowment. There seems to be more evidence that the Times could operate as a nonprofit entity, and media critics are beginning to form a consensus that advertising-profit-driven print media is losing its viability.

  4. Randy Cassingham Says:

    You’re darned right I’d sign up — in a heartbeat. But do I think they’ll actually DO it? Nope. But I’d love to be proved wrong!

  5. Carolh Says:

    Like your idea. As Steve says, need to propose in more detail. Have been a Times subscriber for years. As is the case with scholarly electronic journals, need to shift to a sustained revenue stream not associated with the newsprint version.

  6. Charles Says:

    It’s a good idea, but not a fully fleshed out one. For example, what would the shareholders control and how? In my experience, co-ops are big messy things with a lot of competing interests all trying to make things happen they way they want them to. But often, little actually gets done, and what does get done, gets done slowly.

    I’d much rather see it as a non-profit a la the NPR model.

    I also second Peg’s issue. My local papers are also the Times and the PI. As far as the Times goes, I don’t trust the current ownership as far as I can throw them. I doubt that I’d be happy as an owner of the newsroom because they’d try and hire people and cover things from an angle I don’t like.

    The PI is a better paper, but not a great one. I don’t want to see it die by any means, but in Seattle, we are often the victims of too much process (see our inability to get light rail built until now). If 300,000 of us all owned the newsroom, I’d see one issue a year after all the arguing about who to hire as a reporter.

    I exaggerate to make my point, but I’d be interested to hear your thoughts on the control aspect of it.

  7. Saving newspapers » A Charlie Tryin’ to Get By Says:

    [...] today, there was an idea proposed on PJNet to turn the NYTimes into a cooperative. Or at least, to turn its newsroom into a cooperative. If everyone who subscribes to the New York [...]

  8. Leonard Witt Says:

    Hi Charles:

    You ask about governance as does Jay Rosen on Twitter. It’s an important question that needs to be worked out. But let’s start where we are right now. Right now the weekly Seattle Times subscribers with home delivery pay $4.50 a week. What do they get? A newspaper thrown on their front doorstep, if their delivery person has good aim. That’s it.

    With my plan you pay $2 a week and own the newsroom. Which sounds like the better deal: Now at $4.50 with no say or $2 with ownership.

    Here is the governance starting point: We want high quality, ethically sound journalism and we want the news told without fear or favor.

    Finally, a million people are paying up to $600 a year to get the New York Times. So if they continue getting what they are getting — but better — I think they would be happy enough with the present governance. I would be.

  9. Michael Sippey Says:

    Some people today pay $600 a year for delivery of the physical paper. I may be wrong, but as far as I know exactly 0 people today pay $600 a year for an online only edition of the Times.

    Are there really 1,000,000 people that would pay $400 per year for an *online* edition of the Times? And as Charles points out, what, exactly, do I get for my $400 a year, besides the nice, warm, fuzzy feeling that I’m sure will come from supporting the Gray Lady?

  10. Vin Crosbie Says:

    So the newspapers that are in financial trouble because increasingly fewer people will pay for them in print can be saved if the remaining readers would instead pay nearly the same amounts to access those papers’ otherwise free online editions? And after many years these people can go back to accessing to the papers’ online edition for free again?

    Have I missed something?

    Len, with all due respect, do you think that average people — by which I earnestly mean people who aren’t in the news industry — would actually do that?

    Isn’t the real problem why the majority of people in these newspapers’ markets aren’t subscribing and how to change these newspapers so those people do, rather than burdening the remaining subscribers with saving the business?

    The glaring fact is that you folks are trying to save businesses whose products and services their consumers are rejecting in ever increasing numbers.

    These newsrooms shouldn’t be saved. Their staffs, practices, and products need to be changed.

    By the way, two footnotes:

    (1) According to its own agate, NYT costs $816.40 for a 365-day annual subscription, not “as much as $600″.

    2) NYT is failing in its own home market. It’s print edition circulation there (i.e., ‘Tri-State’ NYC metro market) has dropped by 20 percent this decade. The only reason its the NYT’s overall circ. has fallen from 1.1 million to only 1.0 million during that time is NYT has been hiring printing plants throughout the country and using that distant circ. to countervail its declining home market edition’s circ.

    Unfortunately, the number of national advertisers it gets for both home and distant market editions is far smaller than the number of its home market advertisers it has been losing. Moreover, its remaining local advertisers are paying smaller base rates as the paper’s local market edition circ. shrinks.

  11. How Newspapers Can Stop Being Stupid « A. Fine Blog Says:

    [...] Benkoil on various ways to approach the problem. Another interesting idea was posted today by Leonard Witt of to create a “community trust” for the Times like the Green Bay Packers whereby [...]

  12. Tim Says:

    Get the Governance Right, Then I’ll Subscribe

  13. Leonard Witt Says:

    Hi Vin:

    You are arguing that fewer people find value in The New York Times, and I am arguing that a million people still do value the Times. If your figures are right, they value it enough to pay $800 a year (However, as I professor, I pay much less and I am sure there are other deals too. So just what is being paid in subscriptions requires some research.)

    But there is a bigger question: Do those still paying find value in The New Times’ news or do they find value only when the news is on paper?

    Today we can all can conceive of The New York Times going out of business. At least as a news entity. That was inconceivable just a few years ago.

    So does The New York Times’ journalism as an separate entity, not on paper, have value to enough of the America public that sufficient numbers might want to own it as a national trust?

    Or do we want to take the chance that a new model that produces high quality journalism will replace it?

    For $8 a week, $400 a year, I am ready to make it into a national trust. Personally I cannot think of one thing I own that has as much enduring value.

    Is it because I am a former journalist, maybe. But I talk to lots of non journalists who are also distressed that journalism as we know it might disappear.

    Are you right or am I? A betting person might well place a bet on you. However, we won’t know until we test the idea.

  14. Vin Crosbie Says:

    Although there are still a million people who value the NYT’s daily package of content enough to pay hundreds of dollars annually for daily delivery of it into their hands, my belief is that there are one or two magnitudes more people who would be willing to pay one or two magnitudes less to receive delivery of only pertinent bits (a story being the smallest possible bit) quite regularly, perhaps even daily if pertinent events warrant.

    I see as evidence of this the 20 million registered users of its Web site, each of who on average remembers to visit NYTimes.com four to six times per month to read 16 to 20 stories during the month. Hardly any of them look at every Web page on the site. The vast majority come to see only those few stories pertinent to them.

    Thus, I heretically think that problem for the printed NYT (indeed, the problem for any printed newspaper entering the 21s Century) is it offers subscriptions only for its entire traditional package of content. Too few people are willing to pay $600 to $800 annually for a newsprint product in which only five to eight of fifty to one hundred 600-word stories might interest them enough to read. (For decades, that’s been approximately the average number of stories read per edition.)

    Fifteen years ago, that traditional package of 50 to 100 stories (fewer in smaller newspapers) might have been peoples only source of daily changing information in text. They were willing to pay hundreds of dollars annually for it, even though less than 15 percent of its contents fit their interests.

    However, almost all Americans now have access to hundreds of specialized magazines (and scores of specialized TV channels) and thousands to millions of specialized Web sites. This access in aggregate gives them much higher percentages of hits to their specific interests than the traditional newspaper package does, and is why search engines are now more popular than newspapers. Those people don’t see anywhere near enough value in paying for that traditional package anymore.

    To compensate for these changes, newspapers must begin to supersyndicate their contents. I don’t syndicate as in The New York Times News Service, in which all the top NYT stories are sent to other newspapers where those papers’ editors decide which NYT stories to include in their traditional newspaper package. I mean break the NYT into its individual stories and deliver each story to whoever might be interested in that individual story. All the technologies to do this exist and are in use by other industries that operate online or in print.

    For example, I moved to Syracuse, NY, in 2007, but don’t subscribe to the local newspaper because too few of its stories are interest or are pertinent to me. However, if that newspaper could deliver to me a daily newsprint product containing the few topics about Syracuse that do interest me, the top two or three international stories from NYT, the top two or three financial stories from WSJ, any bulletin or urgent stories from my hometown in Connecticut plus any from the other Connecticut town in which I’ve spent the past 20 years, the E&P Web site’s top stories that day, the Daily Telegraph’s top soccer stories (it’s real hard finding Premiership coverage in U.S. newspapers), then I’d readily pay hundreds annually for that service. Your own choices of content in your edition would probably be much different than mine.

    Again, all the technologies to do that — including the presses to print and presort those editions for delivery — exist and are in operation today by other information industries.

    What if the NYT were earning $20 annually from 300 million of the world’s 6.6 billion people, rather than $600 to $800 from 1 million?

    Would the Seattle Times earn more if, in addition to its existing print subscribers, it were earning something from the additional people who were born or used to live in and are still interested Seattle, plus from many Seattlites who don’t want to pay hundreds now for a subscription to the Times traditional package? (Yes, the paper would lose some marginal subscribers, but I think the revenue gains would more than compensate for those losses.)

    I think this is part of the answer for newspapers in the 21st Century.

  15. Links in the Bay Area - Journalism is All Around « “Community Funded Reporting” Says:

    [...] How to Save The New York Times, Let’s Buy the Newsroom An interesting concept from Leonard Witt (Representative Journalism). If the NY Times went nonprofit – community funded reporting would be something they should consider. [...]

  16. Leonard Witt Says:

    Hi Vin:

    You posted about that model earlier and I really like what you are saying and were saying. But how quickly can that transition happen from one million mega subscribers to maybe 300 million micro subscribers?

    Plus, I think you are talking more about changing delivery systems, I am talking more about preserving the real journalism while we figure out new delivery systems.

    If the New York Times and the Seattle Times are forced to start cutting back on their journalism, there might not be enough high quality journalism left to deliver.

    I have to run now, but will be back with a few more thoughts about journalism and paper and the need to buy more time for journalism.

    But one closing thought: A couple of years ago I came up with the question: What Will Happen When Only the Journalism Is Left?

    But Geneva Overholser warned me that the journalism would be the first thing to go. And apparently she was right.

  17. Endowing every U.S. newspaper: $114 billion. Innovation: Priceless. » Nieman Journalism Lab » Pushing to the Future of Journalism Says:

    [...] from Portfolio’s Felix Salmon, while journalism professor Leonard Witt took the proposal in a different direction. What the discussion has been missing, however, is some good data — and a reality check. So I [...]

  18. Vin Crosbie Says:

    Len:

    Quite right. The third part of my ‘Transforming American Newspapers’ essay – a part that I withheld posting – basically says that newspaper companies should have developed Individuated Media (http://en.wikipedia.org/wiki/Individuation#Media_Industry_use_of_Individuation ) rather than cling to Mass Media services.

    During the 1990s, they should have noticed that the New Media, now the basis of the 21st Century’s media industries, is individuated and not based upon sending the same package of content to every customer. Due to tunnel vision, institutional inertia, and other reasons, newspaper companies failed to see what Google, Amazon, Facebook, and so many other ‘pure play’ companies did. (The mistake was also at the root of Terry Sempel’s misguided attempt to turn Yahoo! into a Mass Media company.)

    It is now too late for many, if not most, American newspaper companies. The transition they needed to make cannot be done overnight; it would have required ten years of work that they should have started in the late 1990s. Instead, they simply spent the time attempting to transplant their Mass Media practices into New Media.

    Moreover, their senior management’s myopia or hubris led their companies to believe that they could simply, and presumably overnight, ‘adopt whatever the successful business model is, once someone develops it’. It was a strategy about as likely to succeed as my trying to adopt the successful model Heidi Klum overnight.

    The successful business model has always existed, but was ignored by the newspaper industry. Newspaper companies instead sought some alchemy that might let their Industrial Era (i.e., Mass Media) business model and business practices succeed in this individuated Information Era.

    Sorry, NYTCo, McClatchy, Media General, Lee, Scripps, Belo, etc., but you blew it and it’s now too late.

  19. David Baggot Says:

    It’s sad to see how many people seem to celebrate or at least take part in the schadenfreude developing over the demise of the daily newspaper. This seems particularly prevalent among those who are advocates of the power of the Internet to deliver innovative new forms of media and communication along the lines of citizen journalism or non-hierarchical editorial processes.

    It’s sad because those things are not mutually exclusive, but what will get completely left by the roadside is the kind of expensive, labor intensive investigative watchdog journalism that cannot be replaced by secondary-source analysis and punditry. That kind of journalism is hugely important, but it absolutely depends upon original reporting for its very existence. Home delivery and overpaid sports columnists might not be that critical to the fabric of society, but ask an online pundit working at home in his drawers whether he’d be willing to spend a year combing through health insurance data or calling reluctant sources in Washington just to get a story.

    “I told you so” is all well and good, but instead of trying to prove how smart we all are for discovering the Internet, we might try to figure out how not to lose the single most important, and totally unduplicated, form of journalism in society today. Without it, we’ll all find out just how rough things can get.

  20. Anthony Salveggi Says:

    Vin’s ideas for a supersyndicated Times that customizes its content to individual readers is on the mark because it forces the paper to innovate now, rather than delay that process any longer because of a new influx of capital. I think Jonathan Weber makes a similar point here: http://www.newwest.net/topic/article/the_problem_with_non_profit_journalism/C559/L559/

  21. Vin Crosbie Says:

    David, my apologies if you took offense or mistook what I said.

    Schadenfreude is the taking of delight in others’ misfortunes. I neither take delight in the newspaper industry’s misfortunes nor is that industry others.

    I am a fifth-generation newspaperman whose family had been publishing a printed daily continuously since 1877. I’ve delivered paper, run presses hands-on, sold ads, covered town governments, edited the paper, purchased its newsprint, published it, and sit on its board of directors. I’m also a former executive of Reuters and of the old UPI. Nowadays, I’m a professor at one of the world’s best J-schools (the Newhouse School in Syracuse), where I teach media management.

    I do understand first-hand the importance of daily newspaper journalism in general, and investigative journalism in particular. I also worry if there will be daily newspaper industry in which the Crosbie family’s sixth generation (now in high school and college) can be part.

    Ifra, the world’s largest organization of daily newspapers, remarked in 2006, “Vin Crosbie is widely regarded as one of the most outspoken and expert critics of how the newspaper industry worldwide and particularly in the United States has responded to the digital media revolution. But no one disputes that his is a critique borne of dedication to the newspaper tradition.”

    So, if I appear blunt when I state: ‘Sorry, NYTCo, McClatchy, Media General, Lee, Scripps, Belo, etc., but you blew it and it’s now too late.’ I not engaging in schadenfreude, unjustified blame, or exaggeration. Those companies’ recent years’ annual reports, plus the stories their publications’ business pages report about their own industry, state what I say far better than I can.

    Indeed, it’s troubling that newspapers whose editorial pages have called for the sacking of CEOs in the automobile and financial industries aren’t calling for the firings of their own industry’s CEOs. The evaporation of equity values and market capitalizations in America’s version of Fleet Street have been as great as in Detroit or on Wall Street. The heart of our industry’s problem lies not in its newsrooms but in its executive suites.

  22. Forget endowments, let’s buy the New York Times! « Virtualjournalist Says:

    [...] On Public Journalism Network, Leonard Witt says instead of setting up an endowment, let the readers buy into the New York Times‘ newsroom through a cooperative trust. If everyone who subscribes to the New York Times paid $400 a year, [...]

  23. Leonard Witt Says:

    I want to address what Michael Sippey at comment #9 said and what others have alluded to:

    Some people today pay $600 a year for delivery of the physical paper. I may be wrong, but as far as I know exactly 0 people today pay $600 a year for an online only edition of the Times.

    I want to get back to my thought experiment which I discussed at an early post entitled:

    It’s Crazy: You’ll Pay $500 for a Newspaper, But Zero for News

    Here it is in an nutshell with different numbers:

    People will pay up to $800 a year for news on paper.

    So what are they paying for the news or the paper?

    We know that if you try to provide people with a paper with just advertising and coupons, they will not pay for it.

    But they will pay for a paper if it has news on it and ads and coupons.

    That would lead me to believe that news has some worth to the people who buy the paper.

    So why does news have exactly zero worth if it is not on paper?

    Could someone please explain that to me.

    Here is what I think, with proper marketing, a proper reading device and a proper strategy, people will pay for digital news that is not on paper.

  24. Vin Crosbie Says:

    The difference isn’t between paper and digital but between two different economics of Supply & Demand.

    An American who wants to read daily news in a portable and easily readable format generally has very few choices, all in preprinted format. He can purchase that day’s edition of one or perhaps two local newspapers (all but a dozen of the nation’s 1,500 largest cities have only one). Or, if he wants to read only international and national news, he can purchase the NYT, WSJ, and USAToday if those are locally distributed. He will probably choose to purchase an edition of the local papers, because those give him a package that includes local news.

    In other words, he has very scarce choices; one or two if he wants a complete package or, at most, one to five if all he wants is international and national news. The economic principle of Supply & Demand means that he’s going to put a relatively high value on those scarce services. He is probably willing to pay $0.25 to $1.00 per day, or between $180 to $800 annually to receive routine delivery of that information.

    However, the principle of Supply & Demand yields a quite different outcome if he wants to the news online. Like 73 percent of his fellow Americans, he probably has Internet access, likely broadband. That means he has immediate, if not entirely portable, electronic access to all of the world’s newspaper, news magazines, and news broadcaster (sites containing news texts). His faces not a scarcity of suppliers, but a surplus, a surfeit, an overabundance.

    The principle of Supply & Demand means that this overabundance is going to plunge the value he’s willing to pay to read that news online.

    Early this decade, surveys of consumers by newspaper economist Mike Donatello found that most were willing to pay something for access to newspaper Web sites. However, what they were willing to pay was no more than $1 per month (the median was closer to $0.50), which is far lower than publisher were willing to charge. (These surveys were done before most Americans had broadband access, so I’ll bet that what they’re now willing to pay is even less because they now have even more immediate access.) The sheer difference between what the sellers want to charge and what the buyers are willing to pay means that there isn’t now any effective market for newspaper content online. It’s Economics 101.

    Moreover and very importantly, the sheer abundance of online news choices that the average American enjoys effectively ‘unpackages’ the traditional newspaper’s package of international, national, and local news (an effect first noted by business writer Evan Schwartz in his book ‘Webonomics’).

    Because the average American has access to every news outlet’s Web site, it’s unlikely he’s going to use his local newspaper’s site for everything, unlike in print. for examples, if he wants to read international news, he’s more likely to visit the Web sites of NYT, CNN, or BBC. If he wants to read national news, he’s more likely to got to NYT, ChiTrib, or WaPo. If he wants to read financial news, WSJ, Fortune, or Forbes. If he wants sport news, ESPN, Sporting News, etc. He’s likely to visit his local newspaper’s site only for local news — the only form of content that other sites don’t offer. Thus, the value he perceives for his local newspaper online is reduced not only because of the abundance he has to other choices, but because the local newspaper becomes ‘unpackaged’ until only its core competency of local news remains, a fraction of its traditional package.

    Truly portable electronic reading devices — lightweight, wireless, and with screens larger than 5×7-inches, capable of displaying video and multicolumlar, complex graphical layouts beyond what HTML can provide — will help make teh value of online newspapers slightly closer to that some Americans still perceive in the newsprint versions — which isn’t saying much in an era when there are fewer and fewer Americans still giving the newsprint editiosn that value. Furthermore, such portable devices won’t solve the traditional newspaper package’s ‘unpackaging’ problem online.

    So, with all due respect to the pioneering Roger Fidler, the ultimate solution isn’t to make the electronic editions more paperlike and portable. It’s to revise the traditional package of newspaper content so to overcomes the online ‘unpackaging’ caused by consumers’ overabundance of choices. That’s why I advocate Individuated (individually customized editions) editions. Regularly delivering those to consumers eliminates their need to hunt and gather the information each individual wants from an overadundance of Web sites and provides far more value per consumer than the 5 to 8 stories fewer and fewer of them might read in the traditionally packaged editions.

  25. In Webworld, Can’t Charge Money for Flight 1549 Story « ReJurno Says:

    [...] In Webworld, Can’t Charge Money for Flight 1549 Story Posted on February 10, 2009 by jestevens Over the last couple of weeks, several articles have appeared about how to pay for journalism, mostly journalism in legacy media, mostly metropolitan newspapers. In Time Magazine, Walter Isaacson suggested micropayments was the answer. Steven Brill offered the New York Times a solution involving micropayments. David Swensen, Yale University’s chief investment officer, and Michael Schmidt, a financial analyst at Yale, suggested endowments for news organizations. Len Witt suggested a cooperative trust. [...]

  26. B. S. Davis Says:

    I wouldn’t give it a cent. The paper is partially a victim of its own poor business practices – by allowing the editorial content to spill over onto its news pages, and portraying itself as the crusading paper of the left and the Democrat party, the Times and most other papers quickened their demise. At a time when leftist rags like Time and Newsweek are bleeding subscribers, the more centrist Wall Street Journal are hanging in there. And conservative magazines like City Journal and Town Hall are starting up from web-sites. So, the problem may not be the format as much as the content – you insult many of your readers like the NY Times, you deserve what you get. I won’t cry for the demise of the newspaper – it has transformed itself in the last 20 or so years from centrist to pro-Democrat Party leftist, in most instances I see. Good riddance!

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