This hasn’t been a good year so far for online publishers.
Digital media stalwarts BuzzFeed, Vice and Verizon Media Group, which includes HuffPo and Yahoo, all recently announced major layoffs. New York Times columnist Farhad Manjoo was so upset about the BuzzFeed layoffs, he wrote that they were “devastating to democracy.”
Manjoo noted that these pure-play companies relied heavily on digital distribution platforms controlled by tech companies such as Facebook, Twitter and Google. These companies “have no economic incentive for symbiosis” with the media providers, he said, and instead can rely on user-generated content to attract audiences and advertisers.
Paradoxically, there’s at least one company that’s actually doing very well in the new digital media era: The New York Times.
On Wednesday, the Times announced Q4 2018 earnings that beat expectations, sending the company’s stock up more than 12 percent.
The reason was not a resurgence in print. In fact, print ad revenues dropped 6.5 percent from 2017 to 2018, and total print subscription revenues were up only 3.4 percent for the year.
But the company’s digital business is thriving.
The Times said it booked $709 million in digital revenue in 2018, bolstered primarily by 17.7 percent growth in digital subscription revenue for the year. The company added 265,000 digital subscribers during the quarter, for a total of 3.4 million total digital subscribers, up 27 percent from the end of 2017. It’s well on its way to reaching its goal of $800 million in digital revenue by 2020 and 10 million digital subscribers by 2025.
A lot of this growth can be attributable to President Donald Trump, whose disdain for the media is well known. The Times saw a big bump in subscriptions after Trump’s election, and its often-critical coverage of the president has found a devoted audience.
But there’s a larger point at play here, too. The Times was early to buck the business model of most pure-play digital media companies, which was to chase massive audiences by publishing free content that was optimized to go viral through social platforms such as Facebook. This led to a race-to-the-bottom of listicles and slideshows and “The one reason” clickbait headlines. In the meantime, as fast as these publishers grew their audience, all of the ad revenue growth went to the biggest platform aggregators, mostly Facebook and Google.
The Times did cooperate with Facebook on some of its initiatives, such as Instant Articles, which reformatted articles to make them more attractive on Facebook, particularly its mobile site. And longtime media watchers may have noticed that the Times headlines are sometimes a little more risque and catchier than they used to be, a possible concession to the massive competition from online publishers.
But the company’s digital business model has always been pretty straightforward: Publish journalism that people want to read, give them a taste for free and then ask them to pay for it.
So far, it seems to be working quite well. And not just at the Times. Amazon CEO Jeff Bezos bought The Washington Post in 2013 and made a number of changes on the back end but also put up a strong paywall. In a 2017 speech, Bezos noted that every time the Post made the paywall stricter, more people paid.
“This industry spent 20 years teaching everyone in the world that news should be free. The truth is, readers are smarter than that. They know high-quality journalism is expensive to produce, and they are willing to pay for it, but you have to ask them. We’ve tightened our paywall, and every time we’ve tightened our paywall, subscriptions go up.”
Now, digital media publishers are racing to follow the lead of the Times and the Post, with everybody from Bloomberg to Business Insider to Conde Nast instituting paywalls. Consumers may soon reach the burnout point with paywalls, leading to an opportunity for the kind of bundled product that has been so successful for the pay-TV industry.
But the lesson for now is clear. People will pay for quality journalism, if you give them an opportunity.
31 NY airports splitting $23.6M from state for upgrades
More than two dozen airports statewide are splitting $23.6 million in infrastructure funding provided by New York state.
Gov. Andrew Cuomo announced Wednesday that the state funding has been awarded to 31 airports to support safety enhancements and modernization efforts. The Democrat says the funds come from an aviation grant program that complements an upstate airport revitalization competition that has provided $200 million in state funding.
The latest round of funding will be used to build new airplane hangars and fuel facilities, improve safety and security, and expand vehicle parking facilities.
The funding is going to airports in the Albany area, central New York, Finger Lakes region, Long Island, Mid-Hudson region, Mohawk Valley, North Country, Southern Tier and western New York.
New York City lied to FEMA about vehicles damaged in Hurricane Sandy, agrees to pay $5.3 million
A hurricane of lies about city-owned Department of Transportation vehicles supposedly damaged by Superstorm Sandy has resulted in a $5.3 million settlement with the feds.
The agreement between New York City and federal prosecutors was revealed in papers filed Wednesday in Manhattan Federal Court. After the October 2012 storm that killed 43 people and caused $19 billion in property damage, FEMA offered federal money to replace damaged city-owned vehicles.
In 2014, a DOT deputy commissioner, who was not identified in papers, certified a list of 132 vehicles the agency claimed were wrecked by the apocalyptic flood. But in reality, many of the vehicles had been out of commission for years, papers show.
Some of the vehicles on the list — which included passenger cars, heavy equipment and commercial vehicles — had been “junk for years,” a DOT employee wrote the deputy commissioner.
FEMA would not have agreed to pay NYCDOT any of these funds had it known that the certifications were false and that many of the vehicles listed…were ineligible,” prosecutors wrote.
In one example, DOT sought $3 million for seven street pavers that had been designated for salvage years before Sandy.
Of those seven, the agency reported to the NYPD in 2009 that five paving machines “are sitting under the highway in the dump for seven years and were being pick(ed) apart by vandals stealing brass fittings, copper wire harnesses and anything else they could sell for scrap,” according to papers.
Nevertheless, DOT sought FEMA money to replace the pavers.
In another example, the city sought FEMA money for a trash pump and trailer, though both were taken out of service in 2010.
The settlement between the city and federal prosecutors requires the approval of a federal judge. The $5.3 million settlement includes the city relinquishing a claim to $1 million it expected to receive from FEMA.
The agreement notes that the city and DOT “did not undertake a sufficient review” of the list of damaged vehicles. The DOT deputy commissioner also “lacked personal knowledge” sufficient to sign off on the list.
“FEMA serves a critical role in providing emergency relief to those who are tragically struck by disaster. When people lie to FEMA about the cause of property damage in order to reap a windfall, it compromises FEMA’s ability to provide financial assistance to legitimate disaster victims in desperate need,” Manhattan U.S. Attorney Geoffrey Berman said.
The DOT on Wednesday said it had taken steps to “reduce the risk of this ever happening again.”
“In 2016, the U.S. Attorney for the Southern District alerted DOT that reimbursement claims submitted by the agency to FEMA included damaged vehicles that may not have been eligible for reimbursement. We cooperated fully with the subsequent review, and worked together to reach an amicable settlement,” the agency said in a statement.
“As a result of the joint review, NYC DOT has already instituted stronger procedures to reduce the risk of this ever happening again, including a new grants compliance officer and a centralized, comprehensive tracking system for the agency’s thousands of fleet vehicles.”
The nonprofit National Insurance Crime Bureau estimated that 230,000 insurance claims for vehicle damage were made as a result of the storm.
Sandy left cars tossed across Cross Bay Boulevard in Broad Channel, Queens. In lower Manhattan, cars were piled on top of each other in underground parking decks. Close to 20,000 damaged cars were stored on a tarmac in Calverton, L.I.
Germany: Taxis denounce Transport Ministry’s deregulation plans
Conservative Transport Minister Andreas Scheuer (CSU) wants to make it easier for companies like Uber to offer their services in Germany and traditional taxi companies aren’t happy about it.
Uber first launched in Germany in 2014, but a string of court rulings and the country’s restrictive transportation laws have limited it and similar companies from offering their ride-hailing services.
In a white paper published on Monday, the Transport Ministry proposed legal changes to inject more competition into the transportation sector.
Chief among them is scrapping a rule that requires private hire drivers to return to a headquarters after every drop-off. The “obligation to return” — which doesn’t apply to taxi drivers — also forbids ride-hailing drivers from accepting new customers during the ride back.
The paper also proposes getting rid of a ban on pooling, which would allow ride-hailing drivers to pick up and drop off additional customers who are traveling on the same route.
Taxis worry about ‘existence’
The Association of German Taxis and Rental Car Services (BZP) quickly denounced the plans as “unilaterally in favor of Uber and other similar services at the expense of taxis.”
BZP’s managing director, Thomas Grätz, told the DPA news agency that changes to the “obligation to return” rule would threaten the sector’s “very existence.”
The association said it would hold a demonstration against the changes in front of the Transport Ministry building in Berlin on Thursday.
Dieter Schlenker, the chief executive of Taxi Deutschland, a cooperative, said the changes could lead to more New York City-style congestion in major German cities.
Consumers want ‘flexibility’
Germany’s leading consumer group, the Voice of the Consumer (vzbv), has welcomed the changes, saying they would inject “flexibility” into the German transportation market.
“The taxi industry and public transport services do not adequately meet the changing demands of consumers,” vzbv expert Marion Jungbluth told the Handelsblatt newspaper.
Any changes should however protect the consumer and the employees of new transportation services, she said.
The coalition government of conservatives (CDU/CSU) and Social Democrats (SPD) is expected to discuss the white paper and publish a full proposal in the next several months.
The parties agreed to reform the sector in their coalition agreement last year. Many lawmakers see a precedent for reform in the 2013 liberalization of the long-distance bus sector.
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