CLIP History in the making in LA as online ads hit target

• • Jeff Jarvis
  • The Guardian, Monday 12 January 2009
  • Article history

Note well this moment in the history - and I do mean history - of newspapers: the editor of the Los Angeles Times, Russ Stanton, said the paper's online advertising revenue is now sufficient to cover the Times's entire editorial payroll, print and online. "Given where we were five years ago, I don't think anyone thought that would ever happen," he said in email. "But that day is here." The same day has arrived for at least one more major US newspaper. What this tells me is that we are on the cusp of the moment when online revenue could sustain a substantial digital journalistic enterprise without the onerous cost of printing and distribution. Hallelujah.

There are caveats aplenty: the LA Times newsroom got to this point because it was cut to a shell of its former self (from 1,200 staff to 660). Online advertising is often sold in packages with print (though if and when print disappears, marketers will have little choice but to shift to digital). And news organisations carry costs besides payroll, such as rent (though some papers are now making their newsrooms virtual).

Still, work with me here: imagine if the Times turned off its presses tomorrow. I've discussed that prospect before, going back to 2005, when Guardian editor Alan Rusbridger acknowledged that his new Berliner presses might be the last this paper would use. But the talk was speculative. Now it could be real: the paperless paper.

I remember the head of another major newspaper company telling me four years ago - with little romantic wistfulness - that if he could abandon print, he would cut $1bn in costs overnight. The problem was that he'd have abandoned about as much ad revenue and would have incurred high shutdown costs.

But at the LA Times, revenue and cost are converging. The paper could avoid some shutdown expenses because its parent, Tribune Company, declared bankruptcy late last year, allowing it to abandon costs and renegotiate contracts. In a conspiratorial frame of mind, one might wonder whether bankruptcy is convenient for the company's head, Sam Zell, a real-estate speculator specialising in depressed properties nicknamed the "Grave Dancer". Bankruptcy could be a convenient cloak for radical change.

Editor Stanton said in an email that he does not think the LA Times should turn off its presses. Plenty of other editors would agree. Indeed, I fear that Stanton's tale will embolden fellow editors to think that online has now grown sufficiently to support them in the manner to which they've become accustomed. For years, I've heard editors demand to know when this internet thing would pay for their newsrooms. Never, I always responded. Your days as an oligopolist are over, I've said, and the scale of the news business and your newsroom will inevitably shrink. Now, perhaps, they've shrunk enough.

But perhaps it won't be a legacy player who breaks this digital barrier. A newcomer unencumbered by the costs, expectations, processes, traditions, and culture of a print newsroom and business could build a profitable online news franchise at low cost. It could operate more efficiently by working in collaborative networks with the community, extending journalism's reach there. It could serve a vast new population of very small advertisers who never could afford print.

So in the LA Times revelation, I see hope: the possibility that online revenue could support digital journalism for a city. The enterprise will be smaller, but it could well be more profitable than its print forebears today and - here's the real news - it would grow from there. Imagine that: news as a growth industry again.