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Subscription Liabilities
August 20, 2009 |
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Remember a month ago when there were rumors that BusinessWeek was going to sell for a dollar and everyone had some brilliant idea of what they should do with it? Well, turns out things aren't quite so cut and dry (which I suspected, as I worked for a magazine in a similar position, albeit with far less liability). Anyway, the magazine has $40 million in subscription liabilities, which Felix Salmon was kind enough to define:
What's a subscription liability? It's basically all the money which BusinessWeek has already been paid, in subscription revenues, for magazines it has yet to deliver. It's a liability because if it can't deliver the magazines, BusinessWeek would have to refund its subscribers their money, or somehow try to fob them off with an equivalent product.
Yet another collision of business reality and media punditry.
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