Re:Um...why? (Score 1)

Why can't they just "copy stories and pictures from the newspaper"? If anyone in the media business would be able to generate bulk traffic (read: advertising $$) from sheer content without any particular bells and whistles, it would be the website that simply mirrors the staggering amount of content from the NYT.

Ultimately, because there is not enough money to be made in online banner style advertising. The typical newspaper is over 50% advertising, inches upon inches of it, all at a lovely 200 dpi. A typical web page supports about 20% advertising, at much lower resolutions. Also, newspaper can't charge as much for each person who views one of their online ads, primarily because they have very effective competition from search engine advertising, which is actually very highly effective.

Take a look at newspaper publisher's 10K and 10Q filings. Online readership is high and growing, but online advertising revenue sucks. Borrell Associates has crunched the number here: http://www.opinionjournal.com/editorial/feature.html?id=110010038. Typical print subscriber yields $500-$900 in ad revenue annually. Typical unique web site visitor yields $5-$10 per year. So as readership moves online, revenue is dropping by two orders of magnitude. This would be a bit more palatable if costs of running an online newspaper were also two orders of magnitude less than the cost of running a print paper. But they aren't. Writing stories is pretty much fixed. We aren't getting much faster at producing 10 inches on the city council on deadline. According to http://www.inlandpress.org/Main.asp?SectionID=61&SubSectionID=244&ArticleID=1031, typical newsroom costs at a paper are around 12-13% of overall revenue. But the best performing newspaper in the US only earns 8.4% of their revenue from online advertising.

The only ad supported internet sites that are making any money are the ones that avoid content creation costs. Look at Flickr, MySpace or YouTube. Billions of photos and videos, all surrounded by advertising. What were their content creation costs? Zero.

This is why newspapers are screwed. Producing content is a sucker's bet. Controlling distribution (online, read: traffic) is where the money is made. Newspapers used to control news distribution because printing presses were expensive. Online, they aren't. NYT is finding itself in the same position that most actors, musicians, book authors, artists, bloggers and, ironically enough, their own journalists have always been in: no bargaining power, lots of competition and low wages.