The numbers behind the numbers

Oversimplification doesn’t even begin to describe it. This column is baseless.The 4.1 million uniques means 4.1 million different people came to the site at least once in the month. But if you return 30 times (once daily) you still only count as one.You could argue that would increase Globe readership, but some number of those uniques came just once and never returned, someone in Des Moines looking for Boston driving directions who inadvertantly clicked on boston.com.There are about 4.1 million different ways to break down those numbers. It requires thoughtful analysis and more data.Dan Kennedy’s way is the most ridiculous imagineable and adds zero insight. I suggest he try harder before posting this stuff.

As Anonymous (what a cool name!) points out, and as I conceded in advance, there are flaws in my back-of-the-envelope calculations. But there’s little doubt that an average of 136,000 people a day are visiting Boston.com, and that this goes quite a way toward explaining why the Boston Globe’s circulation has dropped so rapidly.The fact that Boston.com has 600,000 registered users tends to bolster that theory. Even if 80 percent of them also subscribe to the Globe in print, that leaves 120,000 registered users who only read the Globe online.The Des Moines scenario mentioned by Anonymous illustrates not so much that I’m wrong as it does that counting online is a lot different from counting in print. I might not look at the print edition for five days in a row. Maybe I’ve been too busy, so at the end of the week I stack them up in the recycling pile, unopened. No advertiser is ever the wiser.Online, of course, it’s possible to track precisely what people looked at, how long they spent looking at it, etc. Which has a lot to do with why the business model isn’t working.

Combining print circulation with online hits may be a rough methodology, but it does give a better sense of a publication’s true readership. My household used to receive the Globe, Herald, New York Times and the Wall Street Journal. Now we read all of them on the Internet (except for the WSJ, which charges.) I rarely buy a newspaper, unless I am out of town. DSL costs much less than all those subscriptions. If there is a big story, or I am just wasting time, I may hit the Washington Post and LA Times websites as well, or follow the recommendations of sites like this for particular stories. In a sense it is a return to the pre-television era, when many homes read more than one newspaper.

So Dan, how many people reading online are actually paying any money to read the Globe’s content? I’m not, nor does anyone I know.

Couple of thoughts.1. “Al Larkin, a Globe spokesman, said about half of its six-month circulation drop is due to a decision to eliminate bulk giveaways to hotels and other sponsored deliveries.” Perhaps. But once a month I get a call offering me a 7-day Globe subscription for the same that I pay for just Sundays. For myriad reasons, I always turn them down, but I’m sure many folks take them up on it.2. We really need to know what the longer trend is for circ drops to determine whether, as DK writes, “Readers, though, aren’t leaving.” There just aren’t enough data here to make that call.

Anonymous is correct in pointing out this fallacy: “But, for the sake of simplicity, let’s say that Boston.com and the Globe are one and the same. Divide those 4.1 million monthly users by 30 days in a month (another oversimplification), and you’ve got an average of about 136,000 people reading the Globe online every day.”Almost all surveys of printed newspaper readership (the most recent was by the Readership Institute at Northwestern University) indicate that the average reader of a metropolitan daily newspaper (such as the Globe) reads it 3 to 5 times per WEEK, spending about a half hour each time and scan through all daily pages.By comparison, almost all surveys and meterings of newspaper website usage (including by Nielsen/Netratings and its archrival ComScore Media Metrix) indicate that the average user of a metropolitan daily newspaper’s website (specifically including the Boston.com) uses that site 3 to 5 times per MONTH, spending about a half hour in aggregate there all month and seeing less than 30 webpages during that time.Since there are 4 and 1/3rd weeks in a month, this means the average readers of the printed edition and the web editions aren’t equivalent. Each print edition reader is grossly worth 1:4.33 online readers. Then factor in the difference between the print edition reader reading all pages (40 to 60) daily versus the online reader reading less than 30 pages all month and the differences in their time spent reading, and you’ll realize that there are magnitudes of difference between these two types of readers.It gets even worse: A 2003 survey by of 245 U.S. newspaper websites showed that their average annual revenue measured per user was $7.93 (the revenues for the New York Times Company, which includes Boston.com, was $7.56). Compare that the average annual revenue measured per users of a printed edition. Take the printed Globe’s annual advertising revenues divided by its 460,000 readers and then add the discounted annual subscription rate ($400). You’ll come up with an annual figure between $500 and $800 per reader. Again, magnitudes higher than the online.So, unless newspaper publishers can create compelling enough website that get used, and earn, at least as much as their printed editions of declining circulation do, then there’s no good news that more people are reading the newspaper online than in print.

Why let accurate data obscure the financial picture, eh?Yes, the PROFIT MARGINS for revenue-generating websites are much better than print, and the websites have LOWER costs of equipment and labor.But if a newspaper website earns a 100 percent profit margin on $2 million in revenues, will that $1 million in profit compensate for $20 million drop in profits from a printed edition that earns ONLY a 20 percent profit margin? Whoopee! Happy day! We’ve increased our profit margin five-fold, meanwhile suffering a consolidated loss of $19 million.No. Invoices, employees, and stockholders are paid with dollars of revenues;; not with percentages of profit margin. That’s the true picture