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1/25/2007
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Los Angeles Times Plans To Reinvent Itself To Compete Online

The challenge is to make as much money from its online services as it's losing from the print side.

Los Angeles Times editor James E. O'Shea on Wednesday unveiled a plan to continue publishing the paper rather than perish, as newspaper ad revenue dwindles. In 2004, automotive print advertising at the Los Angeles Times was $102 million, explained O'Shea. This year, he said it would be $55 million.

"With our industry in turmoil, our company for sale, and our futures uncertain, it's easy to forget that journalism is a great calling," said O'Shea to his staff in a prepared statement that outlined a new strategy for the paper. "Sure, we all face daunting challenges, but we still have interesting jobs."

Perhaps not for long. The media industry cut 17,809 jobs last year, up 88% from 9,453 in 2005, according to a study released today by employment consultancy Challenger, Gray & Christmas. The firm said that's the largest annual job-cut total for the industry since media companies cut 43,420 jobs following the dot-com bust of 2001.

"Already this year, we have seen job cuts announced by Time Inc. and the New York Times Company," said John A. Challenger, CEO of Challenger, Gray & Christmas, in a statement. "These organizations will continue to make adjustments as their focus shifts from print to electronic. Until they can figure out a way to make as much money from their online services as they are losing from the print side, it is going to be an uphill battle."

"Clearly there's a sense of real trouble now, and the data would back that up," says Dan Gillmor, director of the Center for Citizen Media and a 25-year veteran of the newspaper industry. The newspaper industry's business model is in trouble, he says, adding that "it's scaring them, and it ought to."

"[W]e can't hide from the fact that smart competitors such as Google and Craigslist are stealing readers and advertisers from us through innovative strategies that are undermining the business model we've relied on for decades," said O'Shea.

O'Shea's plan involves merging print and online newsrooms, breaking news online 24 hours a day, reducing the size of the printed Los Angeles Times, and training journalists to operate in a wider variety of media. "A whole new world is out there -- video, photo galleries, chat rooms, landing pages," said O'Shea. "And to disprove the adage that you can't teach an old dog new tricks, I am going to be one of [newly named special editor for innovation Russ Stanton's] first students. This training is mandatory for everyone."

O'Shea may be on to something. Blog traffic at the top 10 online newspapers more than tripled in December compared to the same period a year earlier, according to Internet market research firm Nielsen//NetRatings, suggesting there is new ad revenue online that may help compensate for lost print ad revenue, at least in part. And a July 2006 study by the Pew Research Center found that "newspapers, which have seen their audience decline in recent decades, are now stemming further losses with the help of their online editions."

Indeed, other leading newspapers, including the New York Times, the Wall Street Journal, and the Washington Post, have been bolstering their online news operations and making changes to adapt to the shift toward online news consumption and Internet advertising. Gillmor cites Gannett as a leader in "bringing the community into journalism."

"What we're in is a time of huge change and experimentation," says Gillmor. "I haven't seen a lot of evidence that the daily newspapers are making the changes they need, though I think they're now very aware that they need to."

With luck, these experiments will lead to a business model that allows quality journalism to continue online. The alternative is something O'Shea alludes to in a comparison of the potential failings of blogging and print reporting: inflicting ignorance on an unsuspecting public because fair, fact-checked reporting costs money that just isn't there anymore.

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