12 August 2007 · Uncategorized

Why Newspapers Are Screwed

Henry Blodgett “runs the numbers” on why a major newspaper, like the NY Times, is screwed as it tries to move its business online. I’ve said this over and over during the last couple of years, but Henry has more cred, so from now on I’ll just quote him instead.

clipped from www.internetoutsider.com

Revenue drops by more than half, 40%-50% of employees get fired, and
the company still loses money. Using the NYT’s Q2 numbers and these
assumptions, for example, revenue would have dropped from $789 million
to $285 million. More importantly, EBITDA (earnings before interest,
taxes, depreciation, and amortization) would have dropped from $118
million to -$64 million. Which means that management would just be
getting ready to fire a few hundred more people.

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