More Carnage at LA Times

picture-64I have largely stopped writing about the layoffs, revenue declines and general troubles of the print newspaper industry. It’s just too depressing for me to focus on. But just imagine being a journalist inside one of these organizations.

PaidContent posts about the latest round of layoffs at the LA Times (though apparently digital isn’t affected). From the paper’s own coverage featuring the internal letter from editor Russ Stanton:

In the coming weeks, the number of jobs across Editorial will be reduced by 70 positions, or 11%. As part of this move, we will be putting into place the final pieces of the newsroom reorganization that we began last year.

I grew up in LA and remember when the LA Times was a great paper (its parent Tribune Co is in Chapter 11). It hasn’t been one for some time.

The trouble with cost-cutting like this is that it accelerates the downward spiral that it may be designed to avoid:

  1. Diminished coverage/features/depth means it’s less engaging and there’s less reason to subscribe or read the print edition
  2. Declining readership means less revenue
  3. That requires more cost cutting

There are those who argue we’re going through a “correction” and that newspapers will ultimately find some sort of cost-revenues equilibrium. I don’t think I agree. Some number of publications will simply disappear — period. The industry overall will be weaker and other media will try and take the place of failed print publications.

While it’s easy to be a critic on the sidelines, I’m not sure if I were running a paper that I would have any magic solutions. The cost cutting is probably mandated by free-falling revenues and economic necessity at this point.

The one bright spot of course is online, where traffic continues to grow:

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The economics of online, however, don’t allow for replacement of lost print revenues — as has been pointed out for a number of years. The newspapers of course are the first beneficiaries of APT, Yahoo!’s display ad platform (and corresponding distribution). Hopefully that will help them significantly in their effort to grow online revenues.

The newspapers can no longer afford to rep their own properties alone and must gain as much distribution as they can for their advertisers. They also need to move more into the SMB segment, which they haven’t been very successful penetrating.

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Take a look at this clip from 1981 on newspapers’ early use of what would become the Internet (originally via NYTimes and TechCrunch):

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4 Responses to “More Carnage at LA Times”

  1. joemescher Says:

    Increasing revenue for the growing online audience to make up for the print shortfall shows to what extent the ad model is broken.

    I believe you’re correct in writing papers need to become more active in the SMB space.

    If local businesses, such as financial institutions, are looking to pursue a specific demographic, why not create and ‘curate’ a third party website for them? Like ‘freechecking(insert state or locale here)’?

    The benefit of creating a 3rd party site is the ability to cross promote it on the growing news site.

    It’s going to be interesting watching the online plans unfold.

  2. Greg Sterling Says:

    The newspapers need to use the services of Radiant Markets or a competitor and be aggressive about it

    http://gesterling.wordpress.com/2009/01/13/maroon-ventures-forms-radiant-markets/

    Also agree about creating verticals and new sites. I’ve advocated this for quite some time: http://gesterling.wordpress.com/2008/12/05/saving-newspapers-trulia-edition/

  3. 212Degrees Says:

    I’d like to see the math and/or case studies that prove:

    “The economics of online, however, don’t allow for replacement of lost print revenues — as has been pointed out for a number of years.”

    Why?

    Is it because Print mediums have been gouging for years and we can’t prove that our leads are as good as print’s?

    Or do we just need to raise retail prices of online?

  4. earlpearl Says:

    Greg: I agree. Its depressing. For whatever their problems and issues newspapers and their staffs have historically been a mechanism to counter the excesses of government. It takes large staffs, lots of experience etc to report in depth on issues that government wants to hide.

    Its not happening in the blogging world.

    Meanwhile, as a result of the significant changes in personnel at the Washington Post, the Washington Times sports writers now write more compelling stories than do the Post writers.

    (I’m going to refrain from commenting on other writing in the Washington Times) :D

    Unfortunately newspapers are on this miserable downward spiral.

    Maybe newspapers could create powerful content for small businesses. They have or had the sales force to be in front of smb business operators.

    Meanwhile, 212Degrees: One only need review the comparisons of losses in print advertising and the gains in web advertising by newspapers to see the difference.

    Is it because print has been gauging us or because online advertising is relatively cheap? Can’t say. As an advertiser, I hated paying high print advertising costs. I didn’t mind as much, as long as they worked. We had a threshold analysis. All advertising needed to return (x) x the cost to pass our threshold. Print did that for years. Then it started to slip.

    Gauging or not….effectiveness relative to costs is the key. (at least IMHO)

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