Don’t stop the presses just yet

Alan Mutter has writ­ten an excel­lent post about why most news­pa­pers can­not afford to shut down their presses and go all-digital.

Mutter pro­ceeds from two premises: that it would be “sui­ci­dal for any rea­son­ably prof­itable pub­lisher to stop its presses in per­pe­tu­ity” and that a paper going all-digital will have to lay off about half its edi­to­r­ial staff to stay profitable.

Newspapers, he points out, earn about 90 per­cent of their prof­its from print ads, and a paper mov­ing to an all-digital for­mat can expect to earn only about 10 per­cent of the money it did when it pro­duced both a hard copy and an online edition.

He takes a closer look at the famous arti­cle by Jeff Jarvis from a few weeks ago, the one in which Jarvis revealed that the Los Angeles Times makes enough from Web adver­tis­ing to pay the salaries of its 660 news­room staff members.

Mutter points out that salaries aren’t all the costs that go into build­ing even an all-digital news­pa­per. You have to pay for health insur­ance, taxes, IT con­cerns and myr­iad other costs, not to men­tion all the debt that the paper has already incurred.

In other words, the LA Times needs its print divi­sion to help pay the bills. Shutting off its presses would mean cut­ting the news­room staff by about half or more.

But Mutter is not going around throw­ing wooden shoes into the all-digital camp’s machinery:

[T]his is not to say that pub­lish­ing won’t, or shouldn’t, migrate to all-digital media in the future. Before that hap­pens, how­ever, the eco­nom­ics of the busi­ness would have to change far more rad­i­cally than they have to date.