Felix Salmon

Why did the NYT nuke Ten Ones?

Felix Salmon
Mar 7, 2011 20:33 UTC

What exactly happened at the Ten Ones blog? I asked NYT spokesperson Kristin Mason, and she replied with this:

It was a copyright issue. The Tumblr blog was positioned as a NYTimes.com account, and it contained many images from NYTimes.com for which The Times did not own or control the necessary rights.

I’m not entirely sure what this means, but I can guess. Newspapers often rent rather than own illustrations: the illustrator owns the copyright, and gives the paper rights to use it in certain cases (like this newspaper or that website). What I’m suspecting happened here is that the Ten Ones blog, run by a former NYT staffer and filled with NYT content, looked as though it was a semi-official NYT property. And if the NYT were publishing certain illustrations on Tumblr as opposed to nytimes.com, that might violate the terms of their license with the various illustrators.

I can understand that much. But then things go a bit weird — it seems that the NYT’s Senior Counsel, on learning of this possibility, went nuclear and effectively destroyed the entire blog. Which is a massive overreaction to what was only ever a theoretical risk based on a possible misunderstanding. After all, Ten Ones was not a NYT property, so the NYT would not have been liable for anything appearing there.

More generally, with the NYT paywall coming Real Soon Now, the paper should be bending over backwards to encourage exactly the kind of inbound links that Ten Ones had very many of. One of the big unanswered questions about the paywall is how much it will reduce the amount of inbound links to nytimes.com — a huge number, and one which is extremely valuable to the NYT. We bloggers have been assured that our readers will be able to read anything we link to on the NYT site, even if they’ve already exceeded their monthly quota — but it still might feel a bit weird, sending someone to a site where they’re boxed in and can only read that one article, banned from navigating anywhere unless and until they cough up a subscription fee.

There’s another possibility here, though. Maybe the NYT nuked Ten Ones because of the paywall: they’re actively trying to shut down sites which do nothing but link to NYT stories, since such sites are effective ways around the paywall. That would be extremely short-sighted, if true. One of the NYT’s hardest tasks, post-paywall, will be remaining a central part of the conversation. It needs loyal readers like Ten Ones just as much as Ten Ones needed the NYT.

The economics of Business Insider

Felix Salmon
Mar 7, 2011 17:54 UTC

Henry Blodget has a great post about the Business Insider business model, in which he reveals that his mini-empire basically broke even in 2010 on $4.8 million in revenue. There was a pretty impressive profit in the fourth quarter of the year — breaking out the Photoshop measure tool and applying it to this chart makes me think that TBI made about $210,000 in those three months, on about $1.9 million in revenue.

Payroll for the quarter was 45 full-timers, plus a bunch of paid interns and freelancers. That makes sense: if TBI’s all-in cost of employing someone, including finding office space for them, averages out to say $10,000 a month, that works out to about $1.35 million in the fourth quarter, plus interns and freelancers, plus other expenses like hosting fees and travel. All in all it’s easy to see how expenses could be about $1.7 million in the quarter.

But there’s something else quite interesting going on in the chart. Look at the difference between revenue and operating income to get quarterly expenses, and it ends up looking something like this:


Compare that to the readership chart:


What you wind up with is something like this. It’s necessarily a bit fuzzy: I’m using quarter-end uniques as a proxy for uniques over the quarter as a whole, and the numbers are volatile. But the big trend is pretty clear:

expenses per unique.png

What’s happening here is that since TBI really started getting going at the beginning of 2008, its expenses have been rising at pretty much exactly the same pace as its audience — it’s been spending between 23 and 36 cents per unique visitor the whole time, with the trend decidedly flat.

This is probably just as it should be: a startup should ramp up its expenses as it grows. Still, I’m not seeing any economies of scale, not even in that huge fourth quarter, where expenses managed to rise just as fast as the visitor count. Maybe there were year-end bonuses or something in there, skewing the figures. But the overall impression is that when Blodget wants growth, he has to pay for it, leaving little money left over for high-prestige luxuries like, say, John Carney. (See that drop in expenses in the third quarter of 2010? A chunk of it is Carney’s departure.)

Blodget writes:

Our newsroom salaries for full-time employees, for example (which include bonuses and benefits) are now higher than at many companies in the traditional news industry. Because the digital news business is quite different from the traditional news business, we often promote from within, and we’ve had the huge pleasure of watching folks who joined us as interns grow up to take leadership positions. True, we can’t yet toss around the $300,000-$500,000 a year per brand-name columnist that Huffington Post and Daily Beast are now reportedly tossing around. But, in future years, if we keep doing what we think we can do, we should be able to pay our top people a lot more than we do today.

(We also give our folks stock options, which helps make them feel and act like they own some of the place. Which they in fact do.)

TBI doesn’t really go in for brand-name writers: there’s talent on the masthead, but nothing that Tina Brown would want to poach for $500,000 or even $200,000 per year. The firing of Carney sent a clear message that insofar as there’s a star culture at TBI, it’s internal, based on pageviews: external fame and visibility is not something Blodget is particularly interested in seeing in his staff.

TBI got some decidedly backhanded respect from Time magazine today, when it placed 25th out of 25 on Time’s list of top financial blogs. Most of the write-ups on the list came from other people on the list, but the magazine doesn’t seem to have been able to find anybody willling to write about TBI, with the result that Time’s Stephen Gandel had to do it himself. “The thinking man’s finance blog it is not,” he wrote, adding that “the site has a reliable market commentator in Joe Weisenthal, though the length of his articles, like those on the rest of the site, seems to have dramatically shrunk”.

It’s pretty clear, at this point, that Blodget has given up on the idea of producing premium content for an elite Wall Street audience. Just like Nick Denton before him, he’s decided that there’s no money in micropublishing, and that if he wants to be very profitable, he’s going to have to go mass-market. Already he claims 8 million unique visitors, and he clearly looks forward to seeing that number rise substantially; there’s nothing elite about an audience that size, and when blogs grow that big they invariably leave their more elite readers behind.

So when Blodget promises that TBI is “going to get bigger and better”, I believe him on the first count. But I’m not so sure about the second.


Rest assured that the financial insouciance that prompted the SEC to take Blodget “behind the woodshed” has permeated the journalistic ethos of TBI.Incisive and informative reportage are devalued, and the number of “hits” per post is the pre-eminent concern. Why care about content when a sexy hook/headline and editorially-mandated vapid slide show can squeeze out a few more hits.
The very regrettable loss of John Carney is emblematic of Blodget’s plummeting cyber-tabloid. The editorial policy is to apparently throw the good journalists off the island and have the interns provide content (at significantly less than $10K per capita per month).
Gentle reader,call me antediluvian but I expect TBI to be informative, and I fear that I will continue to be bitterly disappointed by the low cost/low content course that Blodget has charted.

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The Gupta-Rajaratnam tapes

Felix Salmon
Mar 7, 2011 14:31 UTC

I missed this on Friday:

Prosecutors intend to introduce audiotapes showing that Rajaratnam got inside tips from his friend Rajat Gupta…

Prosectors’ use of wiretaps has been a hallmark of the U.S. hedge fund insider-trading probe, which has resulted in more than two dozen arrests and at least 19 guilty pleas.

Rajaratnam is the central figure in the probe. Prosecutors have said they may present 173 intercepted phone conversations as evidence in the trial.

I find this fascinating, because there’s no indication in the complaint that the phone conversations were recorded at all. There’s lots of information which could have been obtained from phone-company records, about exactly when phone calls were made, what phones they were made from, and how long they lasted. But the big weakness of the complaint seemed to be that it included nothing about the contents of those calls.

Prosecutors of course don’t need to lay out their hand in full when they file their complaint — but if they’re going to come out a few days later and say they have wiretaps, what’s the purpose in keeping that information secret?

It’s possible, I suppose, that those 173 intercepted phone conversations don’t include any of the calls from Gupta, but I doubt it. It’s almost as if the Gupta investigation took place entirely separately from the Rajaratnam investigation, and that only after Gupta was charged could his investigators have access to the Rajaratnam tapes. In any case, it’s all a little odd, to say the least.


It is a little odd, isn’t it.

It is also extremely odd that Rajat Gupta was not criminally charged at all despite the fact that his conduct more egregiously violated the letter and spirit of the insider trading laws than than any other defendant in the probe. Indeed, the conduct of the “expert network” defendants, whom Preet Bharara is trying to put in federal prison for 10-20 years, was child-like in comparison.

It is also odd that Gupta was charged by even the SEC in only an administrative proceeding unlike ALL of the other two-dozen defendants, who were instead charged by the SEC in federal court. As lawyers who work in this area know, an administrative proceeding is the lightest possible thing Robert Khuzami could do to Gupta while still doing “something.” That extraordinarily, inexplicably light treatment was reserved for him and him alone.

Yes, the behavior of Bharara and Khuzami is quite odd. It is odd simply because they are setting the stage to give Gupta, as a member of the protected elite, a pass.

And Bharara and Khuzami will give Gupta a pass because they are quite aware that their future millions in pay-offs from white-shoe law firms (disguised as “compensation” for their inexpert but well-connected representation of future members of the protected elite) depends on it.

Sadly, disgracefully, corruptly odd.

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Felix Salmon
Mar 7, 2011 06:49 UTC

How safe is Janette Sadik-Khan’s bike-friendly legacy? — NYT

Roger Lowenstein on the cost of avoiding muni default — NYT

The Newsweek redesign — SPD

Overstock.com’s Latest Risk: Social Media — Weiss

Stiglitz and Schiffrin with a fantastic review of Spousonomics — NYM

Frat boys in a box — Gothamist

A transcript of David Einhorn’s FCIC interview — Santangel

“Twenty minutes later, possibly under their own steam, the snails arrive.” — VF

TBI made $2k in 2010 — TBI

General Atlantic to invest $65m in Facebook at a $65B valuation — CNBC

Anna Holmes on Charlie Sheen and domestic violence — NYT

The Twitter Story Fail — Techcrunch

Incompetent mortgage servicers read the writing on the wall

Felix Salmon
Mar 7, 2011 06:41 UTC

How incompetent are mortgage servicers? So incompetent that faced with one of the most prominent journalists at one of the most prominent newspapers in the country, they contrived to subject him to, in his words, “a months-long odyssey: rates misquoted, interest charged on a phantom account, legal documents issued in wrong names, a mortgage officer who disappeared for days at a time (first it was his birthday, then his laptop was in the shop), a bounced check from Citibank’s own title company, and the freezing of our bank accounts”.

These stories are less shocking than they should be, these days, just because we’ve heard them so many times. Which is why the banks are going to find it very difficult to say no to the 27-page proposed settlement being offered by the states’ attorneys general. Does anybody have a copy of this thing? I’d love to see the details of the principal writedowns and the like, but although everybody is writing about it (see for instance American Banker, Bloomberg, WaPo, NYT, WSJ) and the NYT in particular says that they have a copy, no one seems to have posted it.

The one thing which does seem clear is that the OCC is still completely captured by the banking industry. It’s the one arm of the government not signing on to the proposed settlement, saying that $20 billion is too much money and could harm banks’ finances. Which is ludicrous, given that banks are chomping at the bit to eat into their capital by paying out dividends. $20 billion is tiny, by the standards of the size of the U.S. banking industry and mortgage market. Anything less would be a slap on the wrist and tantamount to a nod and a wink giving banks the green light to go on treating people like Dana Milbank just as they’re being treated right now.


Oh the irony …. that such a proposal would be seen as unfair to the banks and their servicers.

http://www.bankinvestmentconsultant.com/ news/banks-protest-regulatory-fiat-26719 02-1.html

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The FT’s decline

Felix Salmon
Mar 6, 2011 19:45 UTC

I had a hard-to-follow Twitter debate yesterday about the FT’s paywall, where a couple of FT types — Alan Beattie and John Gapper — told me that the latest numbers for digital subscribers show that I was wrong when I criticized the FT’s strategy in October 2007. I’m often wrong, so that wouldn’t come as a surprise. But in this case I think I was right.

Because the FT is a subsidiary of a much larger corporation, it can confine itself to releasing only the numbers it wants to release. But a few things are clear at this point.

Firstly, the success of the website — if indeed it is a success — has not helped stop the bleeding in terms of print subscribers. Daily print circulation was 485,000 at the end of 2000, and dropped at a rate of about 5,000 a year to 440,000 at the end of 2008. The rate of decline has accelerated sharply since then: print circulation is now 390,000, which means the paper has been losing around 25,000 print subscribers per year over the past couple of years.

The good news is that digital subscribers have been arriving more quickly than print subscribers have been leaving. In the past year alone, the digital subscriber base has risen from 121,000 to 207,000 — an increase of 86,000 people, all of whom are paying print-like subscription rates.

Exactly what those rates are is not easy to determine. FT.com managing director Rob Grimshaw told me a couple of years ago that he loved the kind of airline pricing models where someone who paid $45 for their ticket can be sitting next to someone who paid $945 for the same service. So there’s a lot of opacity built in to the system. But I can tell you a few different rates.

Here in New York, if I lock myself in to an annual subscription, the FT will give me website access (including mobile and iPad) for $259 per year, or “premium” website access, including the Lex column and a couple of other bells and whistles, for $389 per year. If I want the physical newspaper delivered as well, that costs $440 per year. If I sign up monthly rather than annually, the minimum cost for the website is $312 per year, with premium access at $468 and the combined print-and-online subscription at $528. The newspaper-only subscription, with no website access, is annual only, at $348.

All of these numbers are significantly lower than they are in the UK, where a basic web subscription is $380 pear year, the premium subscription is $549, and the combined paper-and-online subscription is $845.

There are a few messages being sent here. Firstly, the FT is taking full advantage of its quasi-monopolistic status among UK consumers who are not particularly price-sensitive to charge very high subscription rates there. But it’s keeping its US rates lower because it’s still having difficulty breaking into this market. Secondly, the FT charges a significant premium if you subscribe monthly rather than annually — which says to me that monthly subscribers have tendencies to disloyalty and letting their subscriptions lapse. And finally, the FT is happy to sell a physical newspaper subscription for less than the price of accessing the same content (including the Lex column) online — indeed, the newspaper-only subscription cost is probably less than the cost to the FT of printing and distributing the physical newspaper six days a week.

While the FT loves to tout its combined subscriber base, then, it’s clearly following two different models at once. The newspaper business is the same as it ever was: lose money on printing and distributing the physical product, but make it all up with ad revenues. The online business, by contrast, is all about the subscription revenues, with ad sales being much less important. Gapper goes as far as to say that 207,000 digital subscribers could actually be worth more to the FT than 20 million unique visitors.

Conceptually, what the FT is doing here is holding onto the ad-supported model for as long as it can, while moving aggressively to a newsletter model for the online product. And the problem here is that while newsletters can be profitable, they’re never important*, and they never go viral: they cut themselves off from substantially the enormous world of opportunity afforded by being online. Successful websites get that way because people share them, with their friends and colleagues and Twitter followers — every reader is also a potential content distributor. Under the FT model, by contrast, the FT itself is at pains to be the only content distributor, and tells readers redistributing its content in incredibly natural ways that they are copyright infringers and in violation of the site’s terms and conditions.

Gapper reckons that the newsletter model means higher cashflow, higher CPMs, lower volatility, and higher p/e ratings. I’m pretty sure he’s wrong on the p/e front: there’s no way that the FT is worth anything like the multiples we’re seeing in the online-content space, whether you look at price-to-earnings, price-to-revenues, or any other ratio.

As for the other metrics, cashflow and low volatility are nice things to have, but massive growth is nicer. And for a news organization which aspires to grow from its UK base to become a genuinely global brand, it’s crucial. The FT’s paywall is structured very aggressively — you have to register after reading just one article per month, and then unless you subscribe you’re cut off after 10 articles per month. That’s good at maximizing short-term cashflow, but it clearly hurts growth: the FT doesn’t release numbers for unique visitors, but both Quantcast and Compete show FT uniques falling significantly over the past year, and actually being overtaken by Business Insider. What I said back in 2007 was that the FT was removing itself from the conversation; that’s exactly what seems to have happened.

I don’t doubt for a minute that the FT’s CPMs are very high. But they’re getting there the wrong way, by minimizing the Ms (the number of pageviews) rather than maximizing the Cs (total ad revenues). Eventually, the FT is going to be such a niche product, compared to other business and finance publications, that global B2B advertisers simply won’t see the point in buying it any more. What it should be doing is becoming so big and important outside the UK that major advertisers feel the need to buy it even if they have no desire at all to reach the UK audience. But it’s nowhere near that point yet, and it doesn’t seem to be getting there, either.

And if the FT isn’t serving advertisers well, it’s not doing so well for readers, either. Paywalls should always be completely invisible to subscribers, but the FT’s fails miserably on that front: subscribers keep on running into that wall on a regular basis, especially when they try to visit ft.com from their mobile device, or when they try to follow a link sent to them by a non-subscriber.

Meanwhile, it’s not just the cost of a subscription which is opaque — the broader FT franchise seems set up to make no readers at all happy with what they’re getting.

Let’s say, for instance, that you’re very interested in China. There’s China content in the FT, of course, which will cost you a few hundred dollars a year to read. If you want wonkier and more in-depth material, a great place to look is FT Alphaville, which regularly takes FT content and then adds very sophisticated analysis and data. Confusingly, Alphaville content is free. And then there’s the Long Room, an elite forum for financial professionals to discuss such matters: that’s free, too. Over to the side, there’s also FT Tilt. That has its own proprietary China content for which it charges thousands of dollars, alongside contributed content which is free with registration. And finally there’s China Confidential, a newsletter which comes out every couple of weeks or so, costs even more than FT Tilt, and which has recently launched a spin-off called China Confidential Funds which doubtless costs more still.

The whole structure feels a bit like Scientology: every time you reach one level, you realize there’s another, more expensive level awaiting you. The China story is of course absolutely central to the FT’s mission of explaining global business and economics — but instead of corralling its resources and creating the best coverage for its readers that it can possibly put together, it balkanizes those resources and has one group of people writing for the paper, another for Alphavile, a third for Tilt, a fourth for China Confidential, and a fifth for China Confidential Funds. From a sheer journalistic-quality perspective, this can’t possibly make sense. And it’s not like there’s a strong correlation between the price of the products and the quality of the journalists, either. It’s really just a mess, a desperate scrabble for revenues from a company which ought to be building the best unified global business coverage it can.

Overall, the FT strategy is exactly the strategy I would choose if I was faced with an industry in terminal decline, and wanted to extract as much money as possible from it before it died. And that’s sad, because the FT can and should be a major global player in perpetuity. Pearson should sell it now, to someone who can invest in it and make it relevant to a fast-growing business audience worldwide. If Pearson fails to do so, the annual decline in the value of the FT franchise will always exceed the dividend that Pearson manages to extract from it.

*Update: I’m getting pushback on this one bit in particular, where I said that newsletters are never important. They can be important within small, specialized groups or industries. But they’re never important to a general audience, or even a general business audience: they only become important when they start targeting very narrow groups like private-equity general partners or hedge fund prime brokers.

Update 2: Gapper responds. He talks about earnings growth at the FT Group as though it proves something — but it doesn’t, because that says nothing about earnings growth at the FT. (One would expect FT Group earnings to be increasing, if only because Pearson keeps on adding things like Medley Global Advisors to the group.)

More to the point, Gapper seems to have convinced himself that the FT’s high CPMs are entirely a function of its paywall, rather than a function of who its readers are. He compares revenues at the FT to those at the Guardian and at Gawker Media (!), and on that basis decides that the FT could never make an ad-supported model work. But of course the FT could still charge very high CPMs even if it was free, they would never come down to general-interest levels.

Gapper seems to think that I said that ad revenues from 20 million unique visitors would exceed subscription revenues from 207,000 subscribers. I never said that. But, pace Gapper, let’s do the math. He seems to think that Gawker Media is a good example of a site with 20 million uniques, so let’s use that as our example: it gets about 300m pageviews a month — 3.6 billion pageviews per year — from its 20m US visitors.

Gapper’s estimate for FT digital subscription revenues is $52 million per year. In order to get $52 million from 3.6 billion pageviews, you’d need revenue per 1,000 pages of about $14. Let’s say you have two ad units per page, and you can sell two-thirds of your inventory. Then in order for your ad revenues to exceed $52 million, you’d need CPMs of about $10 on average. I’m sure the FT can charge much more than that.

Meanwhile, the value of the FT itself is surely much greater with 20 million global readers than it is with 3 million — after all, the media business is all about building as large an audience as possible. Yes, it’s nice to have a diversified revenue stream, which is why Pearson owns lots of subscription-based products and is buying more. But that doesn’t mean the FT itself has to move aggressively away from advertising and towards subscriptions.


Nothing justifies that near 400 dollar price for a year for print. Nothing.

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Chart of the day, US earnings edition

Felix Salmon
Mar 4, 2011 21:33 UTC

The jobs report this morning showed average hourly earnings increasing by 1 cent to $22.87 over the past month; that brings weekly earnings up to $782.15, on average, up 2.3% on last year. That’s a modest improvement, but an improvement all the same.

But Michael Greenstone and Adam Looney decided to take a step back, and look at median earnings across the population overall, rather than just in the working population. The resulting picture, especially for men, is pretty gruesome:


They write:

This analysis suggests that earnings have not stagnated but have declined sharply. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. This is a reduction of 28 percent!

There’s a lot going on here, but a large part of it is that between 1970 and today, the share of men without any earnings at all increased from 6 percent to 18 percent. Many of those men are in prison, but a lot more are simply discouraged.

The blue line in this chart can be read as showing the competitiveness of working-class Americans in an increasingly globalized economy. It’s in secular decline, it’s not coming back, and it has been exacerbated greatly by the loss of 12 million jobs over the course of the Great Recession. Those jobs aren’t coming back, either. The US is going to have to create millions of new jobs going forwards. But it’s also going to have to look after the growing ranks of the unemployed — those who are looking for work, to be sure, and also the growing ranks of those who don’t even bother any more.


including hidden and underemployment the US has a 20% unemployment rate – what can turtlephungi do?

the problem is globalization was used to re-distribute wealth upwards, concentrating it in the financial services sector at the expense of the middle class and long term economic growth. Both sides of the Atlantic are now on the economic periphery, governed by predatory elites who would rather squeeze wealth out of the middle class than do something useful.

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Frank Rich vs the NYT paywall

Felix Salmon
Mar 4, 2011 16:02 UTC

Megan Garber has a great column at Nieman Lab on the effect of paywalls on journalists:

For writers, both professional and non-, both compensated and not, exposure is generally a paramount goal — not for themselves, necessarily, but for their work and their words. That’s why they’re “writers” and not “diarists.” And when it comes to exposure, nothing beats the wide-open web…

Pay models, as walls or any other form, aren’t just business-side structures. They’re both medium and message, and affect all aspects of the news — from the reader to the writer to everyone in between.

There are three points I’d add to Megan’s thesis. The first is that not all writers are equally affected by paywalls. The more you want to take part in the conversation, the more allergic to paywalls you’re likely to be. And Frank Rich is omnivorous in that respect: he loves grabbing ideas from all over the web, linking to them generously, connecting them together, and remixing them in very smart ways.

By its nature, that kind of activity is much harder to do effectively when you’re behind a paywall, since it’s reliant on the people you’re linking to being able to respond to you in turn, and continue the conversation. By contrast, a shoe-leather Metro report about a shopkeeper in the Bronx, say, constitutes essentially a one-way flow of information from the writer to the reader. If fewer readers have access to it, that doesn’t directly affect the quality of the writing.

Secondly, it’s easy but very dangerous to conflate the readership of a website or print publication with the readership of any given writer on that website or in that publication. Jack Shafer does it, and so do sites like Mediaite, when they rank influence according to print circulation and online unique visitors. (Apparently Frank Rich lands somewhere between Rafat Ali and Sebastian Mallaby in the columnists ranking.) But as Nate Silver will happily explain, just because you appear on a high-readership site like the Huffington Post doesn’t mean you actually have any readers — he reckons that the average unpaid blogger on the site gets about 550 pageviews per post, and presumably a similar number of monthly unique visitors.

It seems that Rich is thinking of moving in a sensible direction, at New York: a faster and more vibrant online presence, which can interact with the rest of the web more as it happens rather than weekly, combined with a longer-from monthly column in the magazine, where he can move more in the meaty-and-timeless direction.

It’s entirely possible that Rich’s total online readership at nymag.com will exceed the post-paywall readership he’d have if he kept going with his weekly column at nytimes.com. And it will certainly be more loyal: weekly columns don’t work well on the web, especially not Sunday columns. Shafer talks about the “obvious cues—Sunday morning bagels and coffee, for example—that it’s Rich time”, but I doubt many people look at their sesame-seed bagel with lox and get reminded that they really ought to go find the latest Frank Rich column online. Shafer, of course, knows this better than anybody, working as he does for an online publication which found it necessary to move its publishing pace “from weekly to daily to several times a day” as it embraced the natural velocity of the web.

Finally, Rich is a columnist, and as such he’s a brand in his own right. The NYT has been great at helping Rich build that brand — it’s unrivaled in its ability to bestow traffic and influence on key individuals. But post-paywall, loyal Rich readers will have to pay to read his content, unless they carefully avoid all other NYT articles, or unless they search the web to find a direct link to Rich’s column from somewhere outside the NYT website. Rich’s natural audience is never going to overlap perfectly with that of the NYT; it makes sense that he’s embracing this opportunity to find his own base, rather than continue to piggy-back on that of the Times.

After all, while it’s true that writers care how many people read their stuff, they care even more about who reads their stuff. To take an extreme example, most opinion writers would surely happily sacrifice a million pageviews for the sake of being read by Barack Obama. Rich aspires to a broader audience than that of NYT subscribers: outside the NYT paywall he can reach anybody in the world, and build a web-based franchise where his readers don’t ever need to worry about using up their precious pageview quota. I wish him the best of luck, and I’m quite sure it’s going to be very exciting for him.


I probably wouldn’t, but I should. For all I disagree with some of his positions, Felix raises interesting questions.

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The disappointing jobs situation

Felix Salmon
Mar 4, 2011 14:10 UTC

The general reaction to this morning’s jobs report is “meh”, as you might expect, given the release, where the phrases “changed little”, “about unchanged”, “little or no change”, “unchanged”, and “essentially unchanged” all appear in the first five paragraphs. But that’s largely a function of the fact that the release attacks the unemployment figures first; when it comes to payrolls, they rose by a statistically significant amount — 192,000 jobs, and the trend, while modest, is clearly in the right direction:

Since a recent low in February 2010, total payroll employment has grown by 1.3 million, or an average of 106,000 per month.

The really good news in this report is that it’s looking increasingly as though the sharp drop in the unemployment rate over December and January, when it fell from 9.8% to 9.0% in two months, is less of an aberration than it might seem. The 8.9% rate, while undeniably unacceptably high, is the first time we’ve seen an 8 handle on this figure in almost two years. And remember that in October 2009, the number was 10.1%.

Given that unemployment by its nature falls more slowly than it rises, a decrease of 1.2 percentage points in 16 months has to be taken as an indication that something is, finally, going right. (Other unemployment rates, like the much-discussed U6, are also down sharply: it’s now 15.9%, from 17.0% in November.)

Even the worst news of the report, in table A-12, is something of a statistical aberration: while the mean duration of unemployment hit an atrocious new high of 37.1 weeks, that’s mainly because the upper bound for for unemployment duration was changed this year to 5 years from 2 years. The median duration fell, to 21.2 weeks. There’s still an American underclass of about 2.5 million long-term unemployed, but it does seem to be shrinking a little.

As for payrolls, everybody wishes they were growing more quickly. The current pace is far too slow, and isn’t even enough to keep up with population growth. Or, to put it another way, 2011 is a great year for the jobs report to look good, since for demographic reasons it’s the year when the total number of jobs would rise naturally at the fastest pace, thanks to the growing US population. It’s a good idea to mentally compare the payrolls report to the baseline in this chart, which sobers things up a bit.


The big picture here, then, is that the pace of recovery in the employment sector is real but disappointing. And given the new atmosphere of fiscal cutbacks at both the federal and state levels, I doubt it’s going to speed up any time soon.


hsvkitty, I can’t speak to either number from personal experience. You would need to judge each on the methodology used.

Remember also that statistics depend on definitions. China announced a plan to eliminate poverty within ten years. Of course their present definition of “poverty” is a household income of $.50/day.

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