I used to buy a coffee for 50 cents, and then Starbucks arrived. I used to pay for gas $1 per gallon as well.

The difference is that, 50 cents per copy, it is almost free. I do not expect much, they do not deliver much either. If the price would go to $1.75, I would expect something for this kind of money. They have no idea what it would be.

The short answer is that advertising accounts for about 80+% of revenues at US papers (less in Europe). So if there was no advertising, there would be a big hole to fill – assuming you wanted to keep margins. If you were looking just to break even, it would still be a big hole, but not as big.

Henryk A. Kowalczyk

PS. Please check my text about the Chicago Tribune bankruptcy, http://www.huffingtonpost.com/henryk-a-kowalczyk/the-perfect-test-that-the_b_153554.html

Google worked because it made the ad purchase easy and measurable. The delivery method was less important. The idea that one could measure the effectiveness of an ad was the true revolutionary business model.

My take is that the “new population of advertisers who never could afford newspapers because they were too big (and inefficient)” will mostly move to versioned newsPapers delivered in Print.

It’s going to turn out that for local advertisers the Print ad is the perceived value. The web ad is a nice to have. But since the marginal cost of the web ad is zero, anything that is earned goes straight to the bottom line.

I’m not sure if you noticed, but Scripps has been doing this with the Cincinatti Post.

re: “And news organisations carry costs besides payroll, such as rent…”

The Inland Press Association — I’d be surprised if you’ve never mentioned them has the data on data on cost & revenue across the industry. I figure if anyone could get access to that data and share its summary that would be you. I did find a reference to it from Phil Meyer’s The Vanishing Newspaper. Yes, editorial is ~15% of the cost, but newsprint/production/circulation is only 41%. The rest is advertising costs (the sales staff) and administration/depreciation (e.g., Renzo Piano edifice, and travel/communication expenses).

This 45% wouldn’t necessarily disappear in the online era. I suppose it would be interesting to see what these numbers are today, but then again, I suppose anybody’s whose business is to know these numbers already knows them.

In your column you say, “(though if and when print disappears, marketers will have little choice but to shift to digital).” I’m not sure that’s correct. These days, unlike the old days, marketers have many choices. And will probably have a lot more going forward.

If I understand the column correctly, I’m not convinced that the facts support the conclusions you draw. No doubt web revenues will supply a revenue stream, in the cases where fixed costs are very low, it might support the staff. But in my opinion, the new significant revenue streams for newspapers will come with innovations in Print products, that people will willingly buy, not CPMs from web advertising.