I thought this was a pretty interesting story.
It seems to be the widely held belief these days that media companies will not be able to survive unless they can charge readers for on-line access. Rupert Murdoch is leading the charge with his attempt to force readers to pay for much of the Wall Street Journal on-line comment, as well as the London Sun.
However, New York magazine has been able to be profitable (albeit a small one) despite offering free content. As David Carr's column in this morning's New York Times notes, in 2003 New York was purchased for $55 million by a group of investors lead by the late Bruce Wasserstein. Based on its current level of profitability, it now appears that this purchase price was a bargain:
But the company is doing good business with its suite of Web brands — Vulture, Grub Street, Daily Intel and others, and profits from those enterprises could yield the kind of valuation that makes the $55 million purchase price seem cheap.
In a way, New York magazine is fast becoming a digital enterprise with a magazine attached. Visitors to the magazine’s various Web sites have doubled since 2007, digital sales are up 70 percent over last year and now constitute 35 percent of the revenue at the company. Its MenuPages app has been downloaded to iPhones over 160,000 times and Vulture, the magazine’s pop culture site, is bulking up in hopes of becoming a national presence. The company said that already 75 percent of its visitors to its various sites come from beyond the New York market.
“We’ve always been inherently limited by geography, and the Web has allowed us to build out something for ‘high-slash-middlebrow’ culture for a national audience that nobody is really occupying,” Mr. Moss said.
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