Are eBooks A Rip Off?

wpid-Photo-4-Jan-2013-0940-PM.jpgThere’s been a number of reports over the last two-and-a-half years talking about the slight reduction in ebook sales, and the increase in traditional dead-tree copies. In fact, the paperback market is booming right now, in part due to the increase in the mainstream publishing industry’s dramatically improved production and distribution channels. As I’ve noted before, in the last few years, the likes of Penguin Random House and HarperCollins have invested in these processes by an order of magnitude and are understandably reaping the rewards.

I wrote quite a while ago about how more and more of my own ebook sales were outstripping paper-based sales. This is certainly a movement that’s changed in the last year, with the books I’ve written published by these mainstream titans allowing for more sales and better margins. I wrote that the establishment will do things to slow the move towards ebooks, and maintain their hold on this market. I’ve also written about some of the other reasons why the ebook revolution hasn’t moved as quickly as many had hoped. I think those things are true, but what I didn’t anticipate, was the size and scope of the entrenchment, which has encouraged a return of the traditional paperback for readers in such volume.

Sure, many readers just decided on average, that they prefer paperbacks rather than ebooks. But many – maybe most – really don’t feel this way. However, when there’s comparative price differences between paper or electronic versions of books they want, they might be inclined to by paper. Especially if ebooks prices are over-inflated.

I think this over-inflation continues in part. But also in opposition to that, the way things work at the moment does mean that many authors are not being paid the right amount for their work much of the time.

Let me try to explain with an example, based on 2017 – now I guess 2018 – prices: Imagine there’s a new book out, both in paper form and ebook. We’ll dispense with the hardcover market now so as not to over-confuse things (though this would also work with that market).

Here’s the very basic breakdowns on the paperback version, on sale in the UK for, say £8.99 (which I’ve rounded-up to £9.00 for ease):

9 pound paperback

£9 Paperback Breakdown

As you can see, We’ve got about 40% of the total RRP (Recommended Retail Price) reserved as markup for the retailer. That’s £4.00. Very typical. Many retailers will charge the full amount (after all, they’re taken the risk in buying a lot of stock, etc., and often the deal means they can’t sell all of it back if it doesn’t sell). But many larger chains and online retailers (hello Amazon) can cut into that markup and sell it for less. So a £9.00 book with a high street retailer making £4.00 is sold on Amazon for, say, £6.00 with Amazon making just £1.00, but happy to do so because they sell so many.

The cost of manufacture and distribution for the Penguin Random House/Simon & Schuster’s of this world has never been proportionally lower. They’ve made big investments and it’s paying off. That’s why the cost of physically making each book (allowing for scale) and distribution is just £1.00.

That leaves £4.00 for the publisher. The author will get a bit of that, as will the typesetter, cover designer, etc. That’s essentially the “intellectual cost” of the book. Remember that £4.00, it’ll be important later in this article.

Now let’s look at that same book going on – for example – Amazon on the Kindle platform. It’s the same book, but in eBook form. And you can get it for £4.99 (again I’m saying £5.00 for simplicity’s sake):

5 pound ebook

Typical £5 eBook Breakdown

As you can see, the breakdowns are different. But that’s fine, they should be for the most part. The retailer is handling most of the actual “distribution”. But that’s a tiny cost (don’t let the technical illiterates in the publishing business tell you otherwise), so I’ve been very generous with the 20p cost there. Though I haven’t written it this way, there’s an argument that the 20p cost is mostly for the retailer rather than the publisher, which is fine.

Speaking of the retailer, they don’t have a big risk any more. If the book sells one copy or a million, they just need an electronic copy on a server (or probably several to be safe) and can distribute that as needed. There’s no advantage to economy of scale, but no disadvantage to low sales either. The book-selling business in the ebook world is a low-risk game. So their markup is significantly lower to reflect that. I think that’s fair.

Where there’s a slight problem, is the revenue for the publisher in this model. Just £3.30. Now, there’s lower costs here which is fair. The retailer doesn’t have to make as big a risk on producing thousands of physical copies of a book that might not sell. And they don’t have to pay lots of money for a typesetter either. But they still spend time and money investing in the author. They’re still the big promoters and backers of talent. In the future, I hope that they stay as a significant force in this area. They’re brilliant at it, and I speak from experience. And they still have to pay for someone to design and produce the actual ebook file. Where a typesetter will work full-time for two weeks to finish a typical book (burning the candle at both ends), a finished and edited manuscript can be made into a perfect and standards-compliant ebook format in a couple of days easily. Hell, even I could do it to a decent standard in one afternoon with some of the software out there.

And of course, the author needs to get paid. Sadly, in the current system, the author is the tiny bit of that £4.00 that gets squeezed the most when it goes down to £3.30.

A publisher doesn’t need to make £4.00 from an ebook. But under the current way of doing things, an author often gets financially penalised when someone buys an ebook over a print edition because of the overall lower revenue per-sale that goes back to the publisher.

The quickest, and – based on where the industry is now – the most practical current solution would be to charge a little bit more for ebooks. The sales are what they are, and may not be affected too much (but I understand how the economic theory of ‘dynamic scoring’ could lay waste to this idea, which I readily admit), but this example breakdown could work better in the short-term. Imagine if instead the ebook sold for just a  tiny bit more; £5.70:

5.70 ebook

Example of a Typical £5.70 eBook Breakdown

Now things are a tiny bit different. The manufacture/distribution cost is unchanged. Because the overall price is higher, the percentage markup for the retailer is a bit higher. But the publisher (and therefore the author and everyone else) is left with almost the same as they would have with the £9.00 paperback book.

£3.80 is less than £4.00, yes. But not by much. And that 20p drop is just to account for now having to pay a typesetter as much, and an ebook designer for two days over that two-week typesetting job, and of course not having the risky investment of mass-producing a physical book, which is the big cost. This price would, arguably, disproportionally reward the publisher themselves, but at least it means the author would get what’s owed to her in full.

The best example that I can come up with to highlight the problem right now: Imagine you hire an accountant to do an audit of your finances. They spend a couple of days going over your accounts. Your income, expenditure, savings and investments, Then they publish an almost scholarly-assessment, where they write up with graphs and detailed references, what extra savings they think you should be making, what investments you should consider, and what expenditure you could do without.

Imagine then that they printed that 10-page report out, and put it in an envelope, bunged a stamp on it and mailed it to you with an invoice for the work they’ve done: let’s say it was £300.

Question: If they emailed the report and invoice to you instead, would you expect them to have only charged £230?

Sure, maybe taking the cost of the stamp, the envelope, the ten pages and the ink together, they could have only charged £299 for the emailed copy. But anything less than that, and they’re basically being paid less for the same. Is that fair?

Anyway, that’s my view, and I’m sure even I probably disagree with the oversimplification in this article. Besides, I love, dear reader, you regardless of which format you buy my books – and they’re available in both ebook and paperback form right here!

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The American Presidents Without The Boring Bits 1789-2017

Blank white book w/pathIt’s out now. The updated edition of my (strangely) best-selling book The American Presidents Without the Boring Bits.

If you purchased it as an ebook from amazon.com, or amazon.co.uk or any other amazon site, I believe this is available as a free update (just go into your purchases and click the button by the title to update it).

You can also pick it up via my online store, here.

It’s a brief history of all the American Presidents – updated with a new intro and finally a chapter of number 44: Barack Obama – all told through the lens of a classical-liberal perspective.

More than that, this book was, way back in 2008/2009, my discovery of how the presidents that governed least often governed best. There have been a slew of so-called “mediocre presidents” according to the canon of history literature. But you know what? Generally, those “mediocre” presidents typically presided over proportionally some of the fastest levels of progress of American life; in terms of social mobility, economic prosperity and, heck, good old-fashioned happiness.

obama-apwtbb

I wear my heart on my sleeve during the book, but I hope you’ll take it in the lightness of spirit for which it’s intended. There’s more than a few moments where I take a sledgehammer to conventional wisdom and, indeed, the conventional “cataloguing” of the American presidents that most historians subscribe to. Warren G. Harding is often listed as the worst American president ever (seriously? Worse than Teddy Roosevelt?), but that’s not even remotely fair. There’s plenty of that in there.

trump-apwtbbBut it’s also fun, brief and hopefully, a little thought-provoking. I’m personally really proud of the new chapter of Obama. I think I’ve been fair, and summarised his accomplishments (and failures) in the best way I could.

Anyway, if you’re interested, the ebook edition is dirt cheap, so please do grab your copy for Kindle now.

Enjoy

Your friend,

Andy.

Coming Soon: Succession of Power

Blank white book w/path

Just wanted to give you the heads-up about a brand new book that I’ve written that’ll make its way to a book store (online and brick-based) near you soon.

Succession of Power.

You will be able to buy it for Amazon Kindle, on the iBooks Store and for the Nook, as well as the good ol’ dead tree version. All at pretty competitive prices. I’ll post up more information on that as soon as it’s available.

If you like your thrillers to pack a real punch, then I definitely think you’re going to enjoy Succession of Power.

It’s a political action thriller set in Washington D.C. on the day of the president’s State of the Union speech.

Here’s the blurb:

A bomb detonates inside Capitol Hill during the president‘s State of the Union speech, bringing America to its knees.

Left behind to lead the country under the presidential ‘Succession of Power’ laws is an inexperienced junior cabinet member, aided by the only Secret Service agent who foresaw the horrific act.

Together, they must calm a shaken nation and bring the terrorists to justice before they strike again, while fighting even more sinister forces at the very heart of government.

It’s been a heck of a ride putting this book together, and I really can’t wait for you to read it.

I started writing it during the last week of February this year, and finished it in the last week of August, so it’s been a six-month project, though being swamped at work has stopped me being able to finish it quite a bit sooner.

I had the idea in September last year. I’ve always wondered what it must feel like to be the one member of the president’s cabinet who has to stay behind when the president goes to Capitol Hill to deliver the SOTU. They need someone stay behind in case something terrible happens on the Hill, so that someone in the presidential succession line can take over right away (hence the title).

I really wanted to write a page-turner. It’ll be for you to judge if I’ve succeeded. But one thing that did happen, is the last 45% of the story was written in about the last month. It just came out of me, at 100 miles-an-hour. I was writing it fast, and I hope you read it just as fast. It’s a fun, exciting, pacy high-concept story that hopefully fits in well with the expectations of the genre.

I’ve got a lot of cool stuff in the pipeline, but you’ll excuse me for taking a week or so off before I get back on it again!

I hope this ends up being as fun to read as it was to write. Stay tuned, I’ll have more once it goes live. And of course, it’ll be available on the store here too.

The Rise, Fall and Eventual Rise Again of eBooks

ebookIt was only about five years ago that the world – and me – decided that print books were going the way of vinyl records. In the mid 2000s, the technology that make e-ink screens possible was finally viable for mass production.

Soon after, Amazon released the Kindle, and ebooks went mainstream. Between 2008 and 2011, ebook sales rose 1,260 percent in the US alone. Game over. Independent bookshops, chains and printers stood in fear, waiting for the final death call.

But it never came. It was a close-run thing. Sales were skyrocketing, and in the US, the collapse of bookstore Borders (which filed for bankruptcy in 2011) seemed to signal the very end.

Then the numbers went the other way. Since then, paper-based books have slowly moved back into the mainstream. By this year – 2015 – people like me said ebooks would overtake sales of print. But it didn’t happen. There was something of a plot twist to this story, that I never saw coming. Book stores – including those independent chains – are stronger and more vibrant today than any time before 2010. The American Booksellers Association says they’ve got 1,712 members stores today, compared to 1,660 in 2010. Today, ebooks occupy about 20 percent of the market. That’s about the same market share in 2012. What happened?

I’ve heard a lot of publishers (and authors who have bought this line too) say it’s simply because readers prefer “real” books. And so digital is at 20 percent, and will stay at 20 percent. The market has spoken. I don’t quite buy this. I think there were two reasons why ebooks sales have slumped: one short(er)-term reason to do with a temporary technology disruption from another market, and a longer-term reason to do with corporatism on behalf of the big traditional book-publishing industry.

Let’s look at the first of those. The first mainstream ebook reader in the US, the Amazon Kindle, cost hundreds of dollars when it was first released in the American market. But it sold well. As is pretty much always the case with technology, the prices quickly went down and the features improved. But it’s just an e-ink screen right? So the improvements were incremental. The real push is to lower the cost. Today in the UK, the basic Kindle, (which is much better than the first generation model ever was), will set you back just £59. Adjusted for inflation, that’s a heck of a drop compared to the first model released in 2008. Most ebooks were usually cheaper than their hardback versions, and paperback editions too. Makes sense really. I mean, there’s not a lot of cost involved in the mass-distrubtion of a file that’s typically only a couple of megabytes big, compared to the printing and distribution of a paper-based product. Amazon made big gains with its cheap $9.99 price guarantee for bestsellers (which, because publishers didn’t have the big costs associated with mass printing and distribution, meant that they also actually made more money from the sales of the cheaper ebook versions).

Then a bit of marketplace disruption occurred. In 2010, Steve Jobs revealed Apple’s iPad. “The Kindle’s been great,” he told the enthralled audience at the keynote speech, revealing the tablet to the world for the first time, “but now we’re gonna take it further.” Stephen Fry upon recording his first impressions of the iPad, couldn’t help but write “…poor Kindle.” Tablets had been around for decades, but the iPad was the first tablet computer that captured the imagination of the mainstream. It was a big success, and dozens of rival manufactures brought out their own tablets (including Amazon, with their Kindle Fire range).

Suddenly, in 2010, millions of customers faced a choice. Buy a Kindle (or other e-reader) for, say, $250, or an iPad for $399. Yeah, the iPad is more expensive, but it can do a lot more an a e-reader, which is after all, a uni-tasking device. And the iPad can read books too. Jobs gave a demo of iBooks, and even Amazon produced a Kindle app, so you could read your purchases on the device. Most people, at the time, weren’t going to buy both devices given the prices, so they bought one. And that was the iPad they bought. Or, other, often cheaper Android/Microsoft-based rivals.

But there’s a problem. Reading a book on a bright computer screen – like an iPad – is not the same as reading it on an e-ink screen. The e-ink screen looks like, well, a page. Just printed text on paper. A regular screen is like staring at your laptop. After a while, holding a bigger, heavier, glaring screen to read a text-based book (like a novel or biography) just put people off. So they stopped buying ebooks, and, rather than buying an ebook reader, moved back to paper-based medium. Once bitten, twice shy.

I think this is a short-term issue. But, judging by how slowly the book industry moves, short-term might be 15-25 years. Based on current pricing, I think that the business model of the Kindle could end up being that Amazon will release it for free (“get a free e-ink Kindle for every 5 ebooks you buy!”). So people can have loads of them, all over the house. If you drop one or leave it on the bus, no matter. You can get another for next-to-nothing, and remote-wipe the one you’ve lost/damaged. This ‘free’ ubiquitous attitude will slowly bring people back to ebooks. The rise of people – some of which are very talented – self-publishing on the Kindle Digital Platform, through Barnes & Noble’s platform, Google, or iBooks through iTunes Producer, can also play a part as we see more and more cheap and readily available work. Think about it, the beauty of this, is even if you’re a first-time self-published author, the fact that you’re able to sell as many books (with no upfront risk or cost) as John Grisham is a really exciting and revolutionary thing. Getting it noticed by the public, especially with lots of people releasing utter garbage remains a challenge.

The second problem I see is a trickier one, that could stop things moving forward for a century or more. This is corporatism on the part of the major book publishers. Once the ebook reader arrived, they could see that with nimble, smart, savvy new writers (think E.L. James et al), soon, publishing a book just by yourself could become the “done” thing, even for well-established writers. If Stephen King publishes a book as a hardcover for $19.99, he could see $3 of it. If he were to publish it himself (paying for an editor, cover designer, etc. himself), he could sell it for, say $5, and still make the same $3 off every sale, regardless of how many copies sell, with no risk of doing an overly-ambitious print-run. And at that price, he’d shift many more books.

The big book publishers saw this as a scary future, one to be avoided if possible. Amazon’s $9.99 Kindle bestsellers deal in the US is over, and the publishers are in charge again now. And they’re charging much more for their ebooks than they were a few years ago, (making them less competitive and attractive to readers) while also doing all they can to lower the price of print-book production through innovations and economies of scale. Hachette boosted their Indiana warehouse by 218,000 square feet last year. Penguin Random House have coughed up $100 million to expand and update its wearhorse operations, with 365,000 square feet added in 2014 to its (already huge) warehouse in Crawfordsville Indiana, doubling its size. The boys and girls at Simon & Schuster are set to do the same to their distribution facility in New Jersey: it’s going to be 200,000 square feet larger.

Why the big investment? Because they can put a stranglehold on this business. At the moment, if people mostly buy print books, then big publishers will remain in charge as the gatekeepers, getting their percentage for every copy sold. Because of these expansions and distribution improvements, it’s now often cheaper to buy a paperback version of a book than the ebook version.

I hope this doesn’t last, but I’m not optimistic. I really like publishers, especially the one’s I’ve mentioned above. But I don’t like what they’re doing here. I envisaged a future for big publishers as representing new talent (and established talent), using their incredible editorial, marketing and promotional skills to be champions of quality. Just because “anyone” can self-publish wouldn’t mean they should. There would be a big market – a demand – for publishers who burrow and forage, looking for the best talent out there, and bringing it to our attention. Yes, the margins could be lower for publishers on a per-book basis, but not having to guess what sort of a print-run etc. they have to do would mean the risk is lower too. And they could invest more time not in building ever-bigger factories, but in nurturing more and more talent.

They’d be so important in this brave future. But I fear (and hope I’m wrong) that they could keep things the way they are for the next century and more, before the number of talented self-published writers tilt the playing-field.

 

But don’t forget, you can buy all of my books – both in print and digitally – here! (Sorry, couldn’t resist the chance to cheapen this article with a plug!)

Dan Brown’s Overpopulation Is Overblown

I’ve just finished reading Dan Brown’s latest book Inferno, which I’ve heard is next in line to be a feature film, with director Ron Howard and actor Tom Hanks both on-board.

A lot of people are very snobbish about Brown’s books. My feelings are that this snobbery comes out of the fact that they’re quite popular, and it’s fashionable to look down your nose at what the “masses” enjoy reading on holiday, etc.

I enjoyed the book – another fun straightforward 24-hour thriller that he’s now so well known for.

Another criticism centres around the inaccuracies of his work. But so what if it’s inaccurate? It’s a book, a story – a work of fiction. Let him make up whatever allows his story to be even more exciting I say.

The latest inaccuracies in Inferno centre around the warnings that the human population is rising out of control and so we’ll have to do (cue scary music) “something” to decrease the “surplus population” (as Ebenezer Scrooge put it in Charles Dickens’ A Christmas Carol).

The idea that there are too many humans has been around for some time. Whether it’s the 18th Century scary warnings of Thomas Malthus or Paul Ehrlich’s 1960’s scaremongering in The Population Bomb, there’s never been a shortage of people screaming that the end is neigh.

The fact is though, the overpopulation story is a myth. We’re always on the verge of a population crisis where we can’t feed everyone, and it’s all going to hell. And then it never happens.

Some smart talented people have knocked together some short, simple and highly watchable videos on this subject. They quickly and succinctly give the overpopulation myth a well-deserved reality check:

Many think that we simply don’t make enough food to feed everyone. Wrong again:

And it’s not that there’s too many of us. In some parts of the world, there’s not enough being born:

So it’s good news – if only we could solve some of the problems in the second video (war, poverty, etc.) things would be better still.

DRM on eBooks

wbookA great post on TechDirt about an ebook publisher that hasn’t seen any significant increase in piracy since they stopped using DRM (Digital Rights Management, or copy-protection) on their titles.

If anything, the number of copies purchased increased. I always thought this would happen if you sell your digital products that are more aligned to what the market wants – i.e. a very good price and with no restrictions on where you can make use of them – you will always be better off.

If you have heavy copyright restrictions on a song, TV show, movie or ebook, the pirated version is actually better than the legit version. And you’ve just created a kind of moral hazard – there is now an almost valid reason or motivation to remove that copy-protection and once you’ve done that, why not just add it to a file sharing site or torrent? Where as if you just have it available cheaply, and copyright-free, people just buy it, use it, and – generally at least – have less motivation to share it. Just buy it yourself dude, and use it however you’d like.

Now let’s be clear, I’m a hypocrite. All of my books are available on the Nook, Kindle iPad, etc. And all of them have DRM. But that’s seldom a decision that’s made by the author. That’s a publisher/distributor issue. And I’d love to have no DRM on my books. In fact, DRM-free pdf versions of most of my books are available and as far as I’m aware, it hasn’t increased piracy on my books one jot.

The Future of Written Journalism

I don’t know why I’ve thought about this quite a bit recently. I’m a huge fan of the blogosphere, and I’m really excited by the possibilities of the new digital journalism steps being taken by the main newspaper organisations (like the extract replica e-editions of newspapers, available to buy on a very cheap subscription basis). I also love the new contributors to the scene, who have arrived perfectly placed to take advantage of the digital sphere, like The Daily and the longer-running Daily Beast, which of course merged with Newsweek.

But there are problems. What’s the best business model for these new outlets? How many people are embracing them? Journos are losing their jobs in droves, how do we stop this decline? And indeed, should we be concerned with stopping this decline?

Lots of questions, issues and anxieties. People way more knowledgeable and smarter than me have weighed in on this topic, and I wouldn’t bother contributing unless I thought I had something useful to contribute myself. I’ve got a couple of ideas about the best business models the print world could adopt, and I lay them out here, knowing full-well that I’ve probably missed something out really significant, but I haven’t heard these suggestions made before, so what the hell – here it is, see what you think:

I want to reference two different types of print media: newspapers and magazines. I’m defining magazines are anything that comes out periodically, but not daily. So a monthly, fortnightly or weekly release. Newspapers are (obviously) defined as anything that comes out daily. Clear? Great.

Okay, magazines first. Mags make money partially from advertising revenue, but given the lack of frequency of release (once a week, or once a month), and the lower circulation figures, advertising revenue doesn’t pay a magazines way. Magazines, by and large, make their money from the actual sale of the magazine.

So if you’ve got a magazine that costs £5 say, then about 50p goes on the printing costs (it’s obviously more expensive than a newspaper, all that glossy goodness), about 20p on the distribution, and I’ll guess a £1.30 commission for the newsagent. That means that the average £5 magazine makes about £3 for the publisher, and another 30p per magazine in advertising revenue.

So to create an equivalent digital version for iPads and other tablets, is pretty simple (assuming you don’t put all your content for free online. If you do, then you’ll have to follow the newspaper business model, see below for that). Basically, if you charge about £4.25, then minus Apple’s (or whoever) 30% commission, it’s still £3 per copy purchased, and you could charge the same for the ads, thus making the same amount of money for the dead tree magazine version.

But there’s a vital difference. Typically, newspapers charge a CPM rate for online adverts (Cost Per Mille, or cost per thousand readers), that’s 2.5 times higher than the ads in a dead-tree model. That’s because the ads can be dynamic, they can be more tailored and animated to suit the audience, and crucially, when someone wants to find out more about that product or service, they can just click or tap on the ad, and they can go to a website or video or virtual shopping cart or whatever.

So you can sell ads and generate 75p for the same ads in the digital version. So if you sell the magazine that retails in a dead tree version at £5, (which gives the publisher £3 + 30p = £3.30), you can sell the digital copy that’s exactly the same for just £3.65 and make the same money. (£3.65 minus the digital distributor’s 30% commission = £2.55 + 75p for ad revenue = £3.30 per magazine bought). And you can charge even less for the magazine and sell more which increases the ad and sales revenue further and makes use of an economy of scale.

Newspapers have a totally different problem. The toothpaste is out, and you can’t get it back in the tube. Without understanding what it really meant, the editors happily let the reporters and columnists at all the local and national news outlets publish their content for free online. They had to in a way, competing with all the amateur bloggers, etc.

So now the content is free online. No going back. The ad-revenue per thousand is better than a newspaper ad, but people dive into a news site, see a few pages, and leave. That means they’re only seeing a few ads, even if it makes the news organisation more money per ad.

With a newspaper, a client has to pay upfront for the total estimated circulation to see the ad, whether that was 100,000 people or ten million. And everyone who buys the paper, probably sees all 50-70 ads that are published in the edition.

Digital app-based versions can fix this. When you buy a copy of the electionic paper, it’s a really good and delightfully accessible version, and the purchaser will see all those ads, and those ads are more ‘valuable’ (ads you can tap on them and go to the company website, etc) but…

…But why would you buy it? Sure, they can sell them way cheaper than the paper versions, but all this content is mostly free online, and if you hide it behind a paywall, your listenership will just ditch you and go to your competition.

I think that the best thing to do is dramatically increase your circulation by making the app-delivery totally free. Now that means that lots of people who download the paper each day won’t necessarily treat the paper with the same reverence, but they’ll be way more of them, and they’ll see a hell of a lot of those ads. Let’s just (probably very inaccurately) go over some example figures:

A dead-tree newspaper sells for, say, 55p. Once you buy raw materials, (paper, ink, plates, getting all that stuff delivered to the printers), get the paper printed, get it distributed, and account for the commission from the newsagent, the paper makes about 5p. Obviously, you can’t sustain a newspaper on 5p, (especially as less and less people buy them – why when you can see it all online?), so they need advertising revenue to make ends meet. The average paper generates, say 50p of ad-revue per purchased copy.

Now each ad can be charged at 2.5 times more on a digital tablet edition, and even if someone doesn’t read each ad because they just browse (as it’s available free), you still negate that by having a huge increase in circulation, which will only grow as the paper versions vanish.

So if for a typical circulation, a paper that costs 55p generates 55p of ad/sales revenue. If the current circulation is a million say, that’ll be £550,000 of revenue per day. But if the average person only sees a third of the ads in the paper on the digital version, based on a 2.5 increase in CPM price and a conservative increase in circulation from one million to two million, you’ll see revenue of 40p per download. That means over 2 million downloads would give you £800,000 per revenue per day.

There’s probably a million things wrong with this long, inarticulate badly-written rant, but I can’t help feel that creative destruction will solve the current problems that written journalism is facing. And while amateurs and Twitter will now always be the first with breaking news, professionally produced and written journalism will still provide the high-value contextualisation that we crave. There’s a need for it, and I’m sure there will be a business model that will make it work.