AP Photo/Sang Tan
A man views a news stand displaying national newspapers, some carrying the story on WikiLeaks' release of classified U.S. State Department documents, at a newsagent in central London, Monday, Nov. 29, 2010.
It's becoming abundantly apparent that even a robust online presence can't rescue newspapers as we know them. The problem is simple: online revenue, while growing, can't replace the print losses. This has seriously undermined the profits margins of big-city dailies, from the New York Times to the Los Angeles Times to the Washington Post. Small-market dailies are having an easier time of it, but that's because they have lower costs to support and don't need to become online powerhouses.
Web traffic for newspapers keeps growing, but not fast enough for Washington Post staffers, who on Wednesday learned there would be yet another round of voluntary buyouts at the paper.
The buyouts - up to 48 news staffers at the Post, according to the paper's ombudsman - are the latest in a new round of cuts at major newspapers as online traffic grows and overall unemployment numbers fall nationwide.
The average number of daily visitors to Washington Post's site jumped by more than 3 million, or nearly 15 percent, during the last quarter of 2011, according to a study released last week by the Newspaper Association of America.
The number of unique visitors over that period increased nearly 6 percent, while the total minutes visitors spent on the site rose by 14 percent.
But all those eyeballs are not translating into real money, or at least not at enough of a clip to cushion circulation losses and declining print advertising revenue.
orb9220/Flickr Creative Commons
As I and others have argued, there is no tablet market — there's an Apple iPad market. That said, the Amazon Kindle Fire has come on strong, suggesting that there may be room for an iPad competitor at lower price points (the Kindle Fire sells for $199). We know that consumers will go ga-ga over a cheap tablet that as designed to compete with the iPad. This is why the HP Touchpad found life at $99 and why the BlackBerry PlayBook may gain users if it goes on sale for around the same price. But these were tablets that were envisioned as $500 iPad killers. Who wouldn't want one at a monster discount?
Then there's Barnes & Noble's Nook. There are several models, but the Kindle Fire/iPad competitor (in as much as the iPad can really have a competitor) is the Nook Tablet, priced at $250. Here's where things get interesting. B&N is talking about spinning the Nook off as it's own company. And as DealBook reports, Nook Inc. could be worth almost $1 billion:
I don't know how I missed this, but I did. One of the things I learned after Russ Stanton stepped down as editor of the Los Angeles Times is that the paper's parent company, Tribune Co., is developing its own tablet — not a new and special app for the tablet market, but an actual proprietary tablet — and, from what I gather, it intends to give it away to subscribers. Presumably, the glorious Tribune content on this tablet won't be paywalled, although to Web users the paper will. Who knows, there may even be be content that's exclusive to the tablet.
The Tribune tablet — the Triblet? — is not a good business idea. It's worse than New Coke. Worse that Qwikster. Worse the the DeLorean. Worse than the Edsel. I'd have to stretch to find a more foolhardy concept, far back beyond the meager parameters of my own lifetime. Napoleon's invasion of Russia leaps to mind...
Spencer Platt/Getty Images
The new Amazon tablet called the Kindle Fire is displayed on September 28, 2011 in New York City.
Back in the good old days — you know, 2009 or 2010 — there was the Apple iPad and everything else. When it came to tablets, there wasn't really a true tablet market; there was an iPad market, as my favorite tech writer, Zach Epstein of BGR.com, has pointed out. But now there's another tablet in town. Here is Forbes' Tim Worstall on how the Amazon Kindle Fire will be different from the Apple iPad, business-model-wise:
Apple makes great kit, no doubt about that, but it charges great kit prices for it too. Then it makes a further margin on selling content (music, videos, movies, books) to go onto that kit. Nothing wrong with it but it is a model that might be vulnerable. Vulnerable to someone using the Gillette tactic (“give away” the razors in order to sell more razor blades) as Amazon is. Price the Kindle Fire at just about break even point and hope to make the profits by having a larger installed base to sell the content onto.