BuzzMachine

Not to be too discouraging of the data, but the payroll cost of a newsroom does not go very far in the overall effort.

All of a newsroom’s discretionary costs, from the non-local content through agencies to the travel costs to the computers and other equipment to the local spending on everything from cabs to pencils to stationery to lunches and dinners with sources, are significant. That rubicon ought to be approached, if not crossed, before the print press is closed.
The notion that print advertising will simply shift to online is very presumptive, too. There are many other print options an advertiser would consider first, principally ones that deliver a demographic close to the newspapers. An online site would not necessarily deliver that.
It is unclear, also, if the Times unbundled the print/online buy how far that revenue would slide. The attraction of print serves as a major inducement for advertisers willing to play online.
And, of course, somehow the brand presence has to be maintained and augmented, so the notion of shutting a printing press is one thing, but the notion of eliminating your marketing arm is another.
I still think that, despite the excitement of the LA Times getting good revenue from its site, the notion of it sustaining an operation is some distance away.

Every time I think I shouldn’t bother with the CUNY J school, something like this pops up and makes me rethink my options.

i am the editor of nme.com, a website that sprung just over ten years ago from a weekly music paper that was founded in the UK in the 1950s and is still going strong.

like the LA Times, the paper is still the heart of the brand, traditionally, financially and ‘spiritually’.
it’s certainly true that advertisers are bundling more and more across print and digital – to remove any one part of that mix would undoubtedly damage the other parts.
and don’t forget that a paper is also a tremendous marketing tool for any website (and vice versa, of course) – take it away and the website will fade from public consciousness and lose numbers.
finally, a website often cannot get the same editorial access as a paper through the PR industry. huge names, be they in politics, entertainment or any other industry value the tangible, permanent and paid-for magazine/newspaper cover more than the virtual, free-to-view web. nme the paper can easily get an interview and photshoot with keith richards or coldplay. for nme.com it’s still more difficult, even though the multi-million (3.5m at last ABCe) monthly unique user reach of the website is technically larger than the reach of the print product.

Hmm, just a few thoughts from a business journalist. I’d feel a lot more comfortable if the website’s OPERATING PROFIT covered the cost of the newsroom staff. There are lots of costs associated with generating that revenue, ranging from tech support to advertising staff. Don’t think the rubicon was quite reached, though your posting was an encouraging ideal.

Not sure if killing the presses is necessary. Newspapers were once a medium to reach a mass audience cheaply; that medium is now the Internet. But it doesn’t mean people will stop reading all newspapers. Cheap, everyday newspapers are dying, but I think there will still be demand for some sort of print product. It just won’t be what we have today & it certainly won’t be our core business (and that is what the industry is struggling with).

P.S. It isn’t usual to see prepackaged Chapter 11 bankruptcies (“prepacks” as the industry likes to call them) done for strategic reasons (such as the legacy cost issue) rather than liquidity problems. Federal Mogul’s bankruptcy was a good example of a company, though profitable, deciding to go into Chapter 11 as a way to deal with rising asbestos liabilities and restructure its high-cost U.S. operations. Bankrupty makes a lot of sense for newspapers; it’s a way to get out from under their debt, deal with legacy costs AND impose a radical restructuring to their operations. but it has to be done BEFORE the ink runs red.

My thought is not that the newspapers should eliminate the press room and delivery system, but spin them off. Given the amazing capacity and time to market of a newspaper printing plant, if it were spun off and allowed to do what it does best and leave the rest.

Printers started by being publishers. The publishers became printers. Then publishers disconnected from Printers in the worlds of magazines and books. Perhaps the next step in the articulation of expertise is that newspapers separate the printing function.

As someone who is deeply involved in the production side of the newspaper business, I would like to comment. My job is selling printing presses to newspapers and has been for 30 years. The newspapers are getting out of the printing business as fast as they can. That doesn’t means that there are no more printed newspapers. It just means that the newspaper is no longer printing them. For years they have left their largest asset idle 20 hours a day when they could have been doing other work on the machines. They are closing printing plants and consolidating into regional print sites. If they can’t do that, they outsource the printing.
They contract with a commercial printing plant to print a certain number of pages at a certain price per page. It takes the costs off their balance sheets as overhead and transfers it to the expense column. They get rid of the Unions, the cost of purchase and upkeep of the equipment as well as the employees They couldn’t outsource the job to India, they just send it to the guy down the road. That way as the size and circulation of the paper fluctuates, they only pay for what they use. BTW the commercial printers are buying new equipment with total automation and different formats. The paradigm shifts, the business plan changes and life goes on.
As far as the internet, the sites that offer free advertising that used to be paid for in the classified or display advertising has been the big drain on profits. (Craig’s List, Monster, Auto Trader and all their clones)

Since we’re talking hypothetically…

Wouldn’t freeing the manufacturing and distribution costs allow more room for LA Times to grow online, to venture into more online products in other markets?

That’s where the growth would come from online. That’s where the gaps in business scale begins to close.

I’ve been arguing for some time that the national papers – especially the Post but also the NY Times, the Wall Street Journal, and perhaps USA Today – could become the Washington bureau to the nation’s papers, saving them all money, giving them all the flexibility to redirect staff (reporters and editors) to local coverage, and giving their readers the best coverage. It’s reverse syndication.

The LA Times could play this same role with other papers if it provided the very best coverage of Hollywood and entertainment to them, in return for links and new audience and traffic. News becomes a network of links made by those who do what they do best and link to the rest.

The fatal flaw in this strategy is that if, say, the top two dozen daily circulation newspapers in the country go this route, you wind up with two dozen versions of the Utopia Times/Post/Gazette/News/Journal with essentially identical journalistic content, excepting only local coverage and editorial page – like a USA Today would be if it had uniformly somewhat better copy and regional editions. This is something, to be sure, but salvation for print journalism(?) – probably not. You would have, in essence, two dozen national papers attempting to make money in a market that has persistently failed to well-support a mere five papers with national presence or ambition – NYT, WaPo, LAT, WSJ and USAT. Even if these five find a way to continue making a living by converging their identities in this fashion, off of what are the other 19 supposed to live?

This idea needs to go back to rewrite.

Jeff:

Respectfully, the economics aren’t there.

So many more expenses are attached to the generation of journalism. Payroll is only a piece of it.

It’s true that the decline of legacy media, particularly in the US, must be making people feel like running away and going digital. But there is a far more practical transformation inherent in preserving a print edition (in a smaller, in-depth, commentary-laden and context-laden format) nd developing a digital platform simultaneously.

And, as Mark Glaser pints out in MedaShift, there are many new models emerging that will ease a challenging transition.

At the risk of a really bad phrase: Let’s not throw the granny out with the bathwater.

What we need now is a bailout for newspapers. We must help newspaper journalism survive because it is vital to the Republic. But, only those newspaper companies that can develop a workable plan to quickly transport themselves into the digital age should be eligible for this bailout. And, the money should strictly go toward helping newspapers to stop killing trees and start being Internet only.

Newspapers – or at least newspaper reporters and editors – are critical to our society and democracy. If newspapers start collapsing and closing down, we will lose a public service that’s more valuable than many branches of government. There will be almost nobody to keep government and industry honest without newspaper reporters. The pronouncements of special interests will go unchallenged. People will not know what to believe.

Blogs and so-called citizen journalism can’t do it by themselves. Everybody — TV, radio and blogs — still get most of their information from newspaper reporters.

Unfortunately, people who work at newspapers have been deluding themselves over the past ten years that they could somehow survive in the dead tree business. But the avalanche of bad news, culminating in the hideous bankruptcy of the Tribune Co., cannot be denied. Many newspapers may have only a few years to live. Some will not survive the recession. We will soon see major cities with no newspaper.

Newspapers can survive, but only if they race as fast as possible to the paperless future. They won’t do it on their own; they need some enticement or coercion. A bailout of newspapers won’t cost anywhere near what it costs to bail out Detroit or Citibank. And if the government wants some equity stake as collateral, I’m fine with that. It works with NPR and BBC. So let’s get on with it. If newspapers can come up with a plan to go wholly digital, taxpayers who love democracy should help them out. Newspapers have certainly bailed out taxpayers often enough.

” … Were it left to me to decide whether we should have government without newspapers, or newspapers without government, I should not hesitate a moment to prefer the latter.”

— Thomas Jefferson

Okay, just a couple of thoughts on another very interesting thread:

1) Jeff said: “Indeed, I’ve long argued that newspapers should force both readers and advertisers to online – to the future – and turning off the presses would do that.” Nothing like FORCING your customers to do something. Treat’ em like cattle! I think you may underestimate how many readers will just do without the news altogether, rather than follow you online. I WILL grant that my predicted behavior will probably attenuate itself within a couple of decades.

2) Bail out the newspapers. Wow, sounds like an editor sweatin’ bullets. NFW, dude. Plus, what “strings” do you attach? A “Fairness Doctrine”? Laughable.

3) I also agree that an “us vs. them” mentality isn’t beneficial. Some people you can’t educate, only alieneate, but don’t make it worse than it has to be.

4) Re: Ironshoes’ comment, I work for an engineering firm that used to run its own print shop. They DID actively seek outside work to keep that investment running as much as possible. Seems like a case where, back in the “godd old days”, the paper felt like all was fine, and didn’t look down the road. Well, down the road is here now, fellas.

“NFW, dude.”

way.

there’s been more than a little talk going on about a stealthy bailout of papers “in the name of jobs”.

Well put, Jeff. You know why advertising in the print version of the news costs more than the online version of the same? Because it does — no other reason. That’s how it’s always been. But that is (very) slowly changing. A nice kick in the pants like shutting off the presses will simply accelerate the inevitable.

Remember, it’s content and reporting that are their assets — not sheets of pulp.

Per Matthew’s point: print advertising costs more because it’s more effective. People are more likely to pay attention to a display ad in a paper than a banner ad on a web site. Newspapers need to experiment with text ads, bigger ad formats, and other innovations on the web. And stop with “annoying” ads that grow and shrink and make noise. The more you annoy people, the more they will ignore you.

As for the previous post about crowdsourcing, I love the idea of easily converting digital content into a tangible product with tangible ads. Will it gain mass appeal with crowdsourced content? I doubt it. There’s too much “noise” out there to begin with. But hey, it’s a good idea that fills a niche, and it has lots of potential.

“Remember, it’s content and reporting that are their assets — not sheets of pulp.”

Maybe…consider the explosion of content on the net. What exactly is the advantage of print journalists. Politico has become a content generator for MSNBC. With their recent Reuters deal, they have a good chance to dethrone the AP.

Re printcasting, the real secret sauce is that they are building a way to make easy for local businesses to place ads. That’s one of the secrets that made Google Ad Words so successful. The non profit part is seed money, not scaling money.

Consider also that shoppers, local papers and regional magazines have been doing pretty well. So perhaps the new business model is separating journalism from delivery of physical product. Each has it’s own revenue sources. The fact that they have been conflated in newsPapers may turn out to be an historical phase that is no coming to an end.

Consider also why people have bought newsPapers. Was it because of the news? or was it sports, classified and comics?

In addition to getting rid of all those pesky costs, if the LA Times were to follow Jeff’s (rhetorical?) suggestion, it would be abandoning a million customers a day who continue to vote with their dollars and ink-stained fingers for a printed version of the product. While we manage this transition to the future, it’s important for the industry to recognize that there still are a staggerlingly large number of customers who prefer to consume their news on print. I know that’s hard for residents of Web Nation to grasp, but it would be foolish, it seems to me, for an industry to ignore those customers. Better to find a model that effectively straddles the two customer bases than simply to jettison one of them.