Finance Matters

Archive for April 9th, 2010

Here’s some more bad news for newspapers hoping to rescue themselves by slapping up paywalls. 

Joseph Tartakoff of PaidContent surveyed local newspapers all across the country to figure out how many of them had paywalls and how many online-only subscribers the ones with paywalls had.

The answers? 

Not many.  Of either.

Joseph found 24 local papers with paywalls.

Between them, they had about 10,000 online-only subscribers (our math, adding estimates for the papers that didn’t report any information).

Eyeballing the list of monthly subscription prices (online only), it seems the average monthly online-only price is about $10, or $120 a year.

This suggests that the total online subscription revenue for all the local newspapers in the country is about $1.2 million. (Throw in another few million for papers Joseph might have missed and let’s say the total number is $5-$10 million.)

That’s not going to save a lot of newspapers.

Now, there’s something else to consider here, which is protecting the value to the paper-based subscription and advertising business by not giving the whole thing away online free.  As long as local papers continue to print stuff that people want to read, and as long as people can’t read it for free online, and as long as some other free online competitor doesn’t come into town and provide the same information, people will probably keep ponying up for the paper-based paper. 

So that might save some newspapers.  For a while.  But it’s not much of a growth business.

Check out Joseph’s cool chart >

Join the conversation about this story »

See Also:

• How To Fix Newspapers’ $17 Billion Sales Gap
• Scotland Newspapers Drop Disastrous Paywalls
• The $4 Million Attempt To Save New York’s Newspapers

Avatar is going to be sitting in your Netflix (NFLX) queue long before you see it in your mailbox.

20th Century Fox (NWS) and Universal Pictures (GE) just made new distribution deals with the DVD service that will delay new releases from appearing in their online service for 28 days.

It’s another win for the movie industry. Warner Bros. set the precedent in January with their 28-day delay deal.

As the LA Times tells us, the “first new movies that will be covered by the new Netflix deals are the most popular ones released by Fox and Universal in theaters around the 2009 holiday season: ‘Avatar,’ and ‘It’s Complicated,’ which will go on sale April 22 and 27, respectively.”

The studios are hoping they can sell more DVDs if they hold out on letting people rent the movie on Netflix. According to studio stats, 75% of DVD sell-through happens within in the first four weeks of a new movie hitting the market.

Now both studios need to untangle their legal battles with Redbox to nail a similar deal.

Join the conversation about this story »

See Also:

• Warner Bros DVDs Available At Blockbuster 4 Weeks Before Redbox And Netflix
• Redbox Gives In To Warner Bros., Won’t Release New DVDs For 28 Days
• Movie Piracy On The Verge Of Winning In Spain

(This is a guest post from Vestact.com, a Johannesburg based asset-management company)

Gregory White noted yesterday that The Mining Industry Is Terrified By The Rise Of South Africa’s Julius Malema.

Malema is the enfant terrible of South African politics.

This week’s inflammatory comments about Zimbabwe and his verbal scuffle with a BBC journalist were just the latest in a series of bizarre antics.

Unlike most public figures in this unusual country, Malema makes little attempt to endear himself to the rich and powerful.

Malema’s power in the ruling African National Congress (ANC) derives from his appeal to the marginalised sections of the country’s populace. Notwithstanding much economic progress since democracy in 1994, unemployment levels amongst the (mostly black) urban poor remain unacceptably high.

In the election of 2009 which brought Jacob Zuma to the Presidency, the ANC lost support amongst the urban middle classes, but fared well in the category of first time voters (18 to 23 years) where Malema
campaigned hard. Zuma owes his ascent, in part, to early support from Malema. More than 50% of the population is under the age of 25, so his visibility amongst the youth cannot be ignored.

Malema is certainly no intellectual, and opposition parties have made much of his shoddy high school results. Yet he has seemingly staked his career on an oddball campaign to nationalize the mines in South Africa. This in a country which has an extreme shortage of skilled managers in the private and public sectors, and which has experienced severe organizational challenges in the existing publicly-owned corporations (most notably Eskom, the embattled power utility).

Rather than dismissing the nationalization option as outdated and unworkable, senior members of the cabinet have prevaricated – denying that it is “government policy”, or wringing their hands and saying that the matter “ought to be debated”.

Even more disturbing to local elites are Malema’s comments about Zimbabwe. The prospect of this country turning into an economic hell hole like our northern neighbor is their worst nightmare.

Is the threat that he poses to the stability of the country and its economy to be taken seriously?

We do not think so. It is likely that he will self-destruct before he can do too much damage. 

He leads a flamboyant lifestyle, and journalists have recently uncovered stakes in engineering businesses which have benefited improperly from contracts awarded by municipalities in his home province, Limpopo.  It seems that no taxes have been paid on these irregularly gotten gains, and investigators are closing in.

Malema’s colleagues also finally seem to have had enough. Today, in response to his attacks on the media, the party spokesperson issued this stern rebuke.

South Africa’s formal economy is well developed and resilient.  Apart from the mining companies to which White refers, there is a substantial financial services sector, which is very profitable and highly regarded globally. Tourism, telecommunications, retail, property and manufacturing are also growing strongly.  The business community is well organised, but low-profile politically.

At its core, the leadership of the ruling party understands that the integrity of the tax base must be preserved, in order to address the developmental needs of the nation. More inward foreign investment is needed, not less. They find themselves saddled with a young demagogue who is spouting crackpot economic theories. 

It’s a matter of time before Malema is thrown overboard.

Join the conversation about this story »

Adobe just ratched up the rhetoric in its battle with Apple.

Platform evangelist Lee Brimelow just wrote on The Flash Blog, “Go screw yourself Apple.”

Here’s his full post: