Can the LA Times turn off its presses?

David Westphal reports an important and historic crossing of the Rubicon for a major newspaper, recounting a discussion with LA Times editor Russ Stanton at USC: “Stanton said the Times’ Web site revenue now exceeds its editorial payroll costs.”

I’ve long been asked by newspaper people – as a challenge – when the web will cover the costs of the newsroom as it exists. I’ve said it won’t, that the scale of the business is just different.

But if what Westphal reports is true – and I confirmed via email that I was reading him correctly (and it does make sense since both edit costs and web revenue run at about 10-15% of newspaper budgets) – then it means the Times could support its newsroom as it stands – after cutbacks aplenty – from the web. That’s momentous.

So why not go ahead and turn off the presses and the trucks and turn the Times into a pure news enterprise, disaggregated from its production and distribution businesses?

Now factor into the post-paper newsroom budget the elimination of many tasks – print production, design, editing. Step back from that knife, Mr. Zell. Rather than eliminating those positions, they must be converted to enabling local networks of partners – freelancers, bloggers, citizens – to expand the journalistic reach of the paper into the community.

And now add in the rumor that the LA Times might get rid of its national – that is, Washington – and international coverage and hand it – or its readers – over to the Washington Post. 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.

Clearly, by getting rid of print production and distribution, the LA Times not only gets rid of huge costs – which usually amount to at least half a newspaper’s budget – it also loses both circulation revenue and advertising revenue, which is much higher than digital revenue. As Westphal pointed out in our email exchange, some digital advertising is tied in bundles to print advertising and so the risk is that getting rid of print would hurt digital. But I suspect the opposite would happen: Some of that print advertising will now be forced online. 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.

There’s no question that the scale of the business would be smaller, much smaller. But with only edit and advertising sales costs (I’d market only during the transition) it could be a profitable business – a profitable digital journalistic business. That is the promised land. Welcome to the future.

Note well that bankruptcy makes it easier for a paper the size of the LA Times to consider such a radical move because it resets labor and vendor contracts and relationships with creditors. That size has become a disadvantage for legacy players (and it is why I’ve thought that new players will enter and start to take over these markets). But what if, once past bankruptcy and the cost of shutting down print operations, the LA Times as a news service could be profitable and grow? Yes, grow. News is a growth industry today; newspapers aren’t. But they could be again.

If they do it right, the papers shifts from relentless shrinkage back to practically limitless growth. If they create good hyperlocal networks, they can offer new content at much lower cost and risk (that is, through partnership rather than staffing) and attract new readers at a very local level (while also attracting new readers internationally with that Hollywood coverage). They can create new means to serve an entirely new and very large population of smaller local advertisers who could never afford to use the LA Times before. They could create new services and platforms and find new lines of business.

It almost makes me wonder whether bankruptcy was always part of Sam Zell’s strategy (but I never assume any company or mogul thinks that far ahead). He might lose his investment but if he comes away with the ability to shed huge cost and emerge with profitable, growing enterprises, he could well more that make up for that with future value and even take Tribune Company public again.

All this is why I got a grant from the McCormick Foundation to create a New Business Models for News Project as part of the Center for Journalistic Innovation at CUNY. I plan to work with business students (volunteers?) to play out this model among many others. The time for speculation is over. The time for rebuilding is here.

  • Basement bloggers cum citizen reporters are already providing local coverage [even analysis] in a cheaper way. It is the analysis, vision, and formation of opinion [we used to call editorial] that market will pay for, however, a lot less due to a great deal of supply.

    My 2 cents..


    Subhankar Ray

  • 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.

  • Jeff,

    Interesting post. The issue is larger than you suggest. Dr Gary Hamel proffered a profound thesis that seems applicable here, to wit: “What ultimately constrains the performance of your organization is not its operating model, nor its business model, but its management model.” Tribune and others in the dead tree trade have a leadership problem. Your “do your best link to the rest” and “reverse syndication” concepts are certainly interesting and they do merit consideration, however, both will require bold leadership. The end of distribution would end all dead tree revenues including the still robust revs associated with FSI. These dollars will find new channels as brand managers remain dedicated to tangibles (evidence the continuing spend on DM, your mailbox provides exhibits daily). Perhaps the solution is to reinvent the tangibles marketplace and in the process repurpose the printing and distribution assets.

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

  • mcoletti

    Talking Points Memo ( is a supportive data point. Unlike 90+% of the bloggers that just filter extant news found on traditional newspaper web sites, TPM has real investigative journalists. If I’m not mistaken, TPM broke the news on Stevens’ house remodeling being paid by an oil company. TPM may be the future of web news — an independent real news site.

  • i am the editor of, 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 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.

  • Jeff:
    I think you are on the edge of a new business model. Think of it as a newspaper mashup. People would take those parts of the whole paper which fit a certain interest profile and assemble one of a number custom versions.

    One of the things I’ve always resented about getting the NY Times is the stuff that I’m never interested in that I have to just add to the recycling pile unread.

    Right now there is a big focus on tailoring ads to match people’s shopping profiles, but not as much on the content side. Google and Yahoo news pages allows customization, but it is a coarse filter and done by machine.

    An electronic “paper” which has relevant news and ads created by an “editor” could replace the broadcast model that is the norm (everyone gets everything).

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  • nahua

    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.

  • 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

    Not exactly an alien idea to the industry. Many newspapers already cede their business sections, or at least part of them, to Wall Street Journal provided (and branded) content.

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  • 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.

  • Pablo Manriquez

    The LATimes needs hit the ground running. Regardless of whether or not they kill the print for the digital, what they currently have digitally is laughable at best. In an era of social networking & collaborative content building, offers the user no reason not to catch the repost of their work somewhere else, perhaps at the Huffington Post, where a registered user is equipped to engage, both with the content he consumes and with other users who consume it, as well.

    The first thing the LATimes needs to set up a social networking site on Ning, just like the Huffington Post did at the dawn of Off-the-Bus. This way, they can start to build the collaborative networks that they are going to need to whether the digital storm on their industry.

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  • Ironshoes

    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)

  • But but but I thought those old fogies at the newspapers weren’t listening?

    Can you please correct your narrative a bit? In order for the LATimes to be where it is it – it required lots of hard work and lots of listening and evolving. They’re hard at work and yes – deserve some credit. Far to go yet – but you’re right – a great signpost has been reached.

  • Sorry, Karl, but I’ll still be demanding: They could have been in this position a few years ago. They could have retrained staff for this new world rather than just lay them off. They could have – under previous editors – given up the ego of being an international paper and covered L fucking A long ago. This isn’t about fault or credit in this case. It’s hard business. If you want to give credit, start with the ad sales people online who got the Times to this crossroads.

  • Ironshoes,
    Yes, I’ve been seeing newspapers outsourcing printing and it makes sense: either outsource or free up the pressroom to print anything and make money.

  • Kirk,
    With all due respect: Can I short your stock?
    You can yes-but this all day long.
    But the trend is undeniable. And the wise response is to figure out how to make it work!
    If you don’t, someone else can come in paying less, in a warehouse, with used computers, with no frigging travel budget (it’s local!) and make it work.
    I hear Vancouver is nice.
    I think I’l go there and start a news operation. Sounds like there’s a real opportunity.

  • Jeff, being demanding is great. Being demanding is necessary even. I’m not faulting you for that. Keep on keepin’ on that man.

    But if you haven’t noticed – there is a theme people have picked up by the vibe of your pieces on fault – not necessarily the words – that there is practically no one at any papers that ‘get it’ and if you take Shirky’s BoingBoing piece – they don’t get it because they’ve been willfully ignorant.

    You have a growing number of commenters here attaching their stories to that choir – newspaper journalists all deserve their fate because they don’t listen. Their dumb. Their slow dinosaurs that deserve the tar pit.

    That theme denies you’re own existence. The existence of Dan Gillmor. Jay Rosen. Countless others. The existence of the folks at LA Times who are making this happen. The existence of a great many others who are fighting to transition and evolve in cultures and business environments that are difficult to transform due to decades of industrial legacy weighing on them. Many of the folks you met at the norgs un-conference.

    Ads follow good content. I credit their entire web staff. They have a long, painful way to go – and may not get there – but I’ll repeat what I said at BoingBoing (and I need to get back to blogging instead of commenting) –

    This narrative of “us smart people versus those dumb-asses who deserve what they get” needs to stop.

  • 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.

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  • Incilin – I tend to think journalism – especially where it intersects with software engineering (I’m biased of course) has a terrific future. We’re facing – counting upon how you want to define it – massive filter failure. We *are* the media now. And on average we are no better informed than ten or twenty years ago about the world around us. Journalism is part of the solution. CUNY and in particular Jeff’s classes (even though I am criticizing here in this comment thread) sound terrific.

  • Dick Eagleson

    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.

  • Dick,
    Today, you pretty much have The Associated Press Gazette.

  • 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.

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  • By turning of the presses the LA Times would lose more than just a costly printing proces. My guess is that it would also lose credibility among the younger readers that will never pay for a printed newspaper but nevertheless recognize the quality of the online product by the smell of a printing press.

    I know that, with his question, Jeff Jarvis paints a future. But getting there might be even harder than he thinks.

  • 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

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  • I want to second “This narrative of “us smart people versus those dumb-asses who deserve what they get” needs to stop.” All it does is to increase the status of some and decrease the status of others. It doesn’t make it any easier to figure out what’s going on.

  • Tex Lovera

    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.

  • Tex,
    touche. “Force” is an awful verb. I mean to say that the paper should go to the future rather than waiting for everyone else to get there first, then follow.

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  • invitedmedia

    “NFW, dude.”


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

  • DigiDuck

    As always, this blog produces worthwhile points and counterpoints.
    Worth repeating is Nahua’s observation from Business 101, which no one acknowledged, challenging the starting point for all of this. Assuming a healthy margin for LAT’s online operations, they’re probably no better than half or two-thirds of the way to the Rubicon of covering newsroom payroll costs. Any other newsroom expenses would be further subtraction from truly offsetting editorial costs.

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  • 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.

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  • Richard Jopek Community crowdsourced hyperlocal newspapers. Thoughts?Comments?

  • 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.

  • Mario Villarrel

    About ‘printcasting’. I too looked at it. Interesting expirement. I happen to like the idea greatly but would love to see it in action. Currently it’s a funded project, what happens when the rug gets pulled out? We shall see! At least someone is out there mixing it up. Kudos to the foundation that had the forthought to put real money into such a project.

  • “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?

  • As a Tribune employee (I work on the broadcast side of the operation as a part-time Internet/Technology reporter) I’m interested to see if, how or when this idea might take hold across the company.

    However, it was a comment made earlier in this thread by “jgogek” that really caught my attention. He said something that a lot of print people like to parrot and I’m curious to know if in fact if it’s a true statement.

    “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.”

    Has anyone ever studied the validity of that claim? It may in fact be true, but what context are we talking about? Are we talking about true enterprise or investigative stories? All newsrooms — print, TV, radio, online get blasted with press releases everyday. If a newspaper runs an article based on a story that was pitched to them via a press release or a “beat call” to the cop shop and they happen to publish it before it hits the airwaves or the Internet, does that count as other media “stealing” from the papers when everyone had access to the same information.

    Are we talking primarily major markets where this “print theft” is occurring? There are plenty of small market towns in this country where there are television affliates located but no “local” daily newspaper of record. Where are these folks stealing their news from?

    Hey, don’t get me wrong, I think newspaper reporters do an excellent job. I’ve just grown tired of hearing how everyone is “stealing their stuff.” Back it up with facts.

    In addition to the TV job, I’m also a blogger and full time Professor of Journalism at the University of Connecticut. I’m interested in doing further research on the claim made by “jgogek” and many others. If anyone has any hard data about this, I would love to check it out. Thanks.

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  • 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.

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