Monday, January 12, 2009

Jarvis sees silver lining

At the Guardian, Jeff Jarvis writes today about what he calls "history in the making," as the editor of the L.A. Times tells him that online advertising revenue is "now sufficient to cover the Times's entire editorial payroll, print and online."

Jarvis says that's the case at at least one other paper, and goes on to write: "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."

Yes, this is significant, but pardon me if I remain a bit less enthusiastic.

First, what does "editorial payroll" entail? Does it include benefits, which can increase costs 30 percent or more? We need more information there.

Second, it's nice that it covers the editorial payroll at a severely shrunken operation (cut from 1,200 to 660, as Jarvis notes). But even at 660, there are significant support costs -- facilities, support staff, ad staff, supplies, taxes, etc. Certainly they are much less than running a billion-dollar printing plant. But they are nonetheless significant.

It's this gap that I fear will the hardest to cross. You can cut those costs only so much, as countless other industries (current example: automakers) have found out. In other words, an online site might have to throw off 50 percent more per editorial employee to cover the other overhead. (I'll let people like Alan Mutter, Rick Edmonds or Steve Yelvington, who know with greater precision such figures, fill in the blanks or tell me if I'm shooting blanks.)

So let's not get out the noisemakers just yet.

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