tag:blogger.com,1999:blog-3471471289744825428.post3227416544695903230..comments2024-03-11T00:31:41.186-07:00Comments on The Oregon Economics Blog: Economist's Notebook: On-Line News and the Prisoner's DilemmaPatrick Emersonhttp://www.blogger.com/profile/17242234148546323374noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3471471289744825428.post-35804412743945405632011-03-17T15:37:34.629-07:002011-03-17T15:37:34.629-07:00Sure, if they all got together and established a c...Sure, if they all got together and established a cartel, the margins would improve. I'm not sure the FTC would be too happy about that. <br /><br />Also, if readers drop by 90%, but each of those remaining provides above 10x-marginal cost of new revenue, then it's a win. I think this must be part of the calculation, since print subscribers get it all for free, undoubtedly because ad revenues per person from print are higher (around 10x, IIRC). <br /><br />Plus the NYT isn't a completely substitutable good. There's arguably the WP as a substitue, as you point out, but then what? You're rapidly into the second tier of US newspapers. Let alone down to the Oregonian tier, which is at best a local compliment to a tier 1 paper. I can't imagine anyone would consider them substitutable. <br /><br />If the NYT thinks this move will reduce costs/increase revenue then it may be a way for them to hold on while the others around them burn down. Even the WP itself loses money at a hefty clip, it's just that the WP Company's primary (i.e. not news) business is profitable enough to subsidize it - for now. But it's pretty clear the current model is failing.GeoGeekhttps://www.blogger.com/profile/02596534612535469564noreply@blogger.com