Being a TV per­son, I’m curi­ous about the cost struc­ture of print news­pa­per oper­a­tions. Over at the Monday Note, Frédéric Fil­loux writes:

In a typ­ical oper­a­tion, the biggest costs are indus­trial ones: around 25%-35% for paper and print­ing; another 30%-40% for dis­tri­bu­tion; around 18–25% for edit­or­ial; the remain­ing 10–15% are for admin­is­trat­ive and mar­ket­ing expenditures.

It var­ies from coun­try to coun­try but we can safely assert most of the costs — at least 60% — are indus­trial in nature. Evid­ently, that part dis­ap­pears when going online.

Robert Ivan updated my query from a pre­vi­ous post about print costs mak­ing up 35% of news­pa­per cost struc­ture. Here’s how he got his number:

“Going totally online elim­in­ates the cost of paper and cir­cu­la­tion deliv­ery and rad­ic­ally reduces pro­duc­tion cost. By my back-of-the envel­ope cal­cu­la­tions, based on Inland Press sur­vey data, that might be about 35 per­cent of expenses.” —from Dec. 2007

“Paper and pro­duc­tion costs account for nearly 25% of total expense. Cir­cu­la­tion sales and billing together with fleets of trucks and deliv­ery employ­ees throw­ing papers on the front lawn account for 10% more.” —from March 2008

I think the big disparity in our distribution numbers come from figuring in Circulation revenues. which typically accounts for 30% to the top line. In the case of NYT Q3 2008, circulation represented 32.8% of total revenue. Production costs however consumed ~48% of total revenues. The difference is roughly a 10% cost, or in this case 16%.

This leads in to a whole other problem that newspapers are fighting with. Newspapers are losing money delivering newspapers (circulation wise). June 2002. They relied on print advertising to make up the difference and it worked until now.