The Back of an Envelope (at Ignite NewsFoo)

Andrew Walkingshaw @covert, @timetric http://timetric.com/The back of an envelope.

Enrico Fermi (1901-1954)

Trinity Test: July 16, 1945

10 One. 1 10 100Orders of magnitude

Three rules: 1. State your assumptions 2. Justify your guesses3. Be “dimensionally consistent”

Population of Chicago: ~5,000,000 Households: 5,000,000 / 2 people ≈ 2,500,000 Pianos: 5% of households ≈ 125,000 pianos Assume: each piano tuned once a year, taking ~2 hours: => ~250,000 piano-tuning hours=> 250,000/8 hours per tuning day ≈ 30,000 days 200 working days a year => around 150 tuners

And, actually:290 “musical instrument repairers and tuners” – (source: Bureau of Labour Statistics, 2009)

Sanity check.

How big is the US newspaper industry?value ≈ number of papers sold x revenue per paper npapers * $/paper = $total

Readers:(number of potential readers x papers per reader) Revenue:net price + ad sales per copy

How many papers are sold a year? 225m people (aged 20-80) so around ~100m households maybe 25% buy a paper? => 25m daily circulation~400 days a year, so 10bn a year

How much revenue per copy? Sales revenue: ~$0, more or less Revenue from ads ≈revenue per ad x number of ads ≈ 2¢ x 100 ≈ $2 per copy

So total US newspaper industry: ≈ 10bn papers x $2/paper ≈ $20bn per annum!

Actual number: $24.8bn print ad revenue(2009: Newspaper Association of America)

Online: 200m working adults 200 working days per year 4 pages each 4 ads a page$5 cpm per ad = 0.5¢ per view=> 200m x 200 x 4 x 4 x 0.005 ≈$3.2bn online ad revenue

Actual: $2.7bn (NAA, 2009)

(For comparison: Bloomberg LP do ~$7bn revenue per annum.)

When in doubt: check!

Thank you! http://timetric.comhttp://withpretext.comandrew@timetric.com @covert, @timetric

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The Back of an Envelope (at Ignite NewsFoo)

by Andrew Walkingshaw on Dec 04, 2010

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The Back of an Envelope (at Ignite NewsFoo) — Presentation Transcript