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The back of an envelope.
Andrew Walkingshaw@covert, @timetric
http://timetric.com/
Enrico Fermi (1901-1954)
Trinity Test: July 16, 1945
1 10 1001000One.
Orders of magnitude
Three rules:
1. State your assumptions2. Justify your guesses
3. Be “dimensionally consistent”
Population of Chicago: ~5,000,000Households: 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 days200 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 xpapers 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 lessRevenue 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 adults200 working days per year
4 pages each4 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!
