The Shrinking & Growing Industry

“Dean Baquet, the editor of The Los Angeles Times who defied orders from his corporate bosses to cut jobs, was forced out of his own job today, shocking his newsroom just as it was gearing up to cover election returns.”

I’m not going to pretend to know all the politics of the newsroom, nor the subtleties of the newspaper business. It’s been well-documented that newspaper print subscriptions are down significantly around the country (the LA Times was down 8% in the previous 6 months), as are ad placements within those newspapers. However, the curious part of this tale is that aggregate readership when the web is factored in is larger than ever, and that the LA Times operating profit margin is 20% higher than the average Fortune 500 company.

Prudent business management is proactive and not reactive, so perhaps management knows something we don’t. Or perhaps management is just wrong, and misguided by a short-term numbers game rather than concerning itself about the longer term growth of the web and an obligation to provide quality news coverage. Any business has solvency as one of its pillars, but it’s not the only pillar.

I’m not in denial about the decline of print, but if aggregate readership through the web is higher than print ever was, I would argue that more money and thought leadership should be put into monetization of the web. Perhaps it is ultimately the editors? fault for not finding the magic combination for web success. I’m certainly shocked that magazines and/or with declining print circulations but growing web presences seek to hire veterans of print rather than installing more forward-thinking denizens. But I digress.

If a video sharing site with rejects from America’s Home Videos can attain a viewership of tens of millions and then be sold for $1.65B, then a newspaper should be able to find a modicum of financial success with quality content that doesn’t result in layoffs.

Over-simplification? Let me know what you think.

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Allen Murabayashi is the Chairman and co-founder of PhotoShelter.

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