Date: Mon, 4 Nov 1996 02:25:40 -0500 (EST)
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Rex Ballard - Director of Electronic Distribution
http://cnj.digex.net/~rballard
On Wed, 16 Oct 1996, J.R. Wilson wrote:
> On Tue, 15 Oct 1996 14:40:13 -0400, Benjamin Compaine wrote:
>
> >Some rough calculations indicates that the WSJ-I is pulling in revenue of
> >$4.5-$5.0 million annually -- assuming no growth in subscriptions or
> >advertising, which is a very conservative view. Of this, rougly 25% is from
> >subscriber payments -- generally in line with the ratio of major print
> >newspapers.
> >
> >I take an optimistic viewpoint -- it looks encouraging for me. Of course,
> >I've been saying for quite awhile that if high quality content such as the
> >WSJ can't make a go of a reader support, who will?
>
> You're more optimistic than the Journal. When they first announced
> they would be going to sub/ad support, the exec in charge said it
> would take $12 million a year in revenue for them to *break even* --
> and he divided that roughly 50/50 subs and ads. Frankly, I'm not sure
> how they can be spending that much, given most of the copy already is
> theirs, everything already is computerized, software and hardware paid
> for and templates automating much of the layout work.
Remember, their editorial platform is on VMS, their News Retrieval is on
MVS, and their distribution is on HP. The editorial workstations are Sun
Sparcs, and they do Layout work on NT.
They also have to deal with capacity issues, There are also royalties to
Microsoft, splits with MSN, and an overload of NT servers. Their
expenses include percentages of much larger projects running over 150
million (that have yet to bear fruit).
There is a common mentality among the big publishers that believes that
anything cheap can't be worth anything and that the quality of a computer
is determined by the amount of money it produces in advertizing revenue.
Microsoft NT 3.5 was "Wonderful", Sun is "Adaquate", and Linux doesn't
even exist.
The small publishers have a less interesting agenda. They can put up a
publisher platform on Linux or Sun, do their editing on '95 or Linux, and
use standard HTML on standard editors. A small publication can be
profitable on $1 million. Dow Jones needs ES/9000 mainframes, DEC Alphas,
Tandems, and other special hardware and software that has very little to
do with publishing on the internet. As a result, $12 million is a break
even point.
> My guess is the person responsible for both the print and on-line
> versions is dumping massive amounts of print overhead onto the on-line
> side,
Actually, more like NRS and development overhead. Dow Jones wrote the
original specifications for what is now known as JAVA, but didn't see the
value of it until after they had traded off the intellectual property
rights.
> giving him a much better print balance sheet and still leaving
> some new on-line revenue.
Ironically, they are suffering in the print area. Print revenues are down
and so are traditional archive access (NRS). They need to recoup
development costs somewhere.
> End result: He looks like a knight in
> shining armor to the board (costs down, income up -- can you say
> "bonus"?). "Course, maybe I'm just a crotchety old cynic. . .
Actually, many of those most closely involved with the Internet effort are
no longer with the company. Others who should have gotten recognition
were ignored, and others who fought it tooth-and-nail until the final
release day became the "heroes". Some of the best talent was recruited
away by Microsoft.
> Cheers,
> J.R.
> =======================================================
> J.R. Wilson mailto:JRWilson@pollux.com
> Publisher http://pollux.com
> Pollux Publishing AeroWeb-CompuWeb-DefenseWeb
> Our Writers Are Our Reputation
> =======================================================
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