It was just announced that Reader's Digest has been sold for $US 2.4-billion. That's about 1.5 times as much as Google paid for YouTube, which got me thinking.
I think that these two media operations are at opposite ends of the spectrum, and I doubt that there's an overlap in their audiences. I think of YouTube as being very aligned to a younger demographic and, conversely, I think of Reader's Digest as having a primary readership in the 40+ age group. And, according to Wikipedia, RD reaches more $US 100,000+ readers than Fortune, The Wall Street Journal, Business Week and Inc. combined.
Over the years, RD has expanded to include numerous international editions. YouTube had an instant international presence.
YouTube is purely an electronic forum while RD is primarily a paper-based product although it does have websites associated with, at the very least, the American and Canadian editions.
YouTube is primarily based on user-generated content with some legal commercial content (and much illegal commercial content) in the mix. RD is primarily based on commercial content, supplemented by a small amount of user-generated content.
YouTube is a few years old; the venerable RD was founded in 1922. RD is the best-selling magazine in the United States. YouTube is one of the most popular websites.
I haven't looked at the financials of either operation, but RD has a clear and traditionally profitable business model -- you don't last 84 years without being profitable. YouTube hasn't been around long enough to be said to have a track record and its on-going profitability is uncertain given a potentially very fickle audience.
RD commissions much of its own content has been dealing with rights clearance for its acquired content for years. YouTube has serious copyright issues to deal with and may lose audience share by following what much of its audience likely views as the heavy-handed removal of copyright-infringing content.
These two operations couldn't be more different, yet both serve a similar purpose. They provide short-form content to their audiences, though these are vastly different audiences and, arguably, in the long term, one audience demographic is waxing and the other waning.
What has me thinking, though, is whether the 1.5 times price difference between the two is appropriate. Putting a dollar value on a company like Reader's Digest is easy, though projecting long-term trends in these changing media times is a bit tough. Putting a dollar value on a company like YouTube is much more difficult.
Is RD worth 1.5 times what YouTube is worth? Is it worth less than that? Or is it worth more than that? I have no idea... but, like I said, it's got me thinking.
I think that these two media operations are at opposite ends of the spectrum, and I doubt that there's an overlap in their audiences. I think of YouTube as being very aligned to a younger demographic and, conversely, I think of Reader's Digest as having a primary readership in the 40+ age group. And, according to Wikipedia, RD reaches more $US 100,000+ readers than Fortune, The Wall Street Journal, Business Week and Inc. combined.
Over the years, RD has expanded to include numerous international editions. YouTube had an instant international presence.
YouTube is purely an electronic forum while RD is primarily a paper-based product although it does have websites associated with, at the very least, the American and Canadian editions.
YouTube is primarily based on user-generated content with some legal commercial content (and much illegal commercial content) in the mix. RD is primarily based on commercial content, supplemented by a small amount of user-generated content.
YouTube is a few years old; the venerable RD was founded in 1922. RD is the best-selling magazine in the United States. YouTube is one of the most popular websites.
I haven't looked at the financials of either operation, but RD has a clear and traditionally profitable business model -- you don't last 84 years without being profitable. YouTube hasn't been around long enough to be said to have a track record and its on-going profitability is uncertain given a potentially very fickle audience.
RD commissions much of its own content has been dealing with rights clearance for its acquired content for years. YouTube has serious copyright issues to deal with and may lose audience share by following what much of its audience likely views as the heavy-handed removal of copyright-infringing content.
These two operations couldn't be more different, yet both serve a similar purpose. They provide short-form content to their audiences, though these are vastly different audiences and, arguably, in the long term, one audience demographic is waxing and the other waning.
What has me thinking, though, is whether the 1.5 times price difference between the two is appropriate. Putting a dollar value on a company like Reader's Digest is easy, though projecting long-term trends in these changing media times is a bit tough. Putting a dollar value on a company like YouTube is much more difficult.
Is RD worth 1.5 times what YouTube is worth? Is it worth less than that? Or is it worth more than that? I have no idea... but, like I said, it's got me thinking.
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