Tuesday, 25 May 2010

If people pay for online newspapers, how much will they loose

At $1 a month, with viewer retention of 70 percent, subscription revenue would be $566 million. But ad revenue would drop by 30 percent, or $933 million, for a net loss of $367 million.
At $2 a month, with viewer retention of 50 percent, subscription revenue amounts to $808 million. But newspaper sites would kiss away half their ad revenue, or $1,555 million, for a net loss of $747 million.
At $5 a month, and 30 percent of visitors sticking around, subscription revenue swells to $1.212 billion. But 70 percent of ad revenue, or $2.173 billion takes a walk, cutting the net by $946 million.
At $10 a month, sites retain just 10% of visitors, who pay a collective $808 million for the privilege, but 90 percent of ad revenue ($2.798 billion) flies the coop, leaving newspapers poorer by $1.990 billion.
At $25 a month — well, I won’t bother with the arithmetic. Make your own assumptions, but nearly all the ad revenue goes away and viewer fees don’t replace more than a small fraction of it.

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