The editor of the Los Angeles Times mused this week that online revenue exceeded the payroll costs of his newsroom.
Very quickly people have drawn conclusions of a new era arriving. In his latest post, Jeff Jarvis of Buzzmachine suggests it's time to close the printing plant.
Others I've seen on Twitter and elsewhere have suggested this is ammunition that a corner has been turned and new media has gained new viability.
A few things need to be added to the jubilance, though:
1. A newsroom isn't simply about payroll. Its expenses are formidable, from the equipment it uses to the travelling it does to the office space it occupies. It has legal expenses to protect its work from lawsuits. It has all sorts of expenses for non-local content. It has benefit expenses outside of payroll. So, there are many more steps to go before newsroom costs are met.
2. A sales force is not obviously self-liquidating. It is a significant cost against revenue. The online revenue may equal the newsroom's payroll, but the expense against that revenue isn't.
3. A lot of online newspaper advertising is tied into print buys. Sever that connection and my sense is that a lot of that revenue vaporizes.
4. The disappearance of a print product does not force advertisers into the online space. First it forces them to find other print products that might produce similar results. In other words, the purchasing decision isn't for the brand, but for the medium.
5. A news operation doesn't have an audience merely because it exists. It depends on extensive and sustained marketing in a community, and that marketing is most reliably done by --- ta, da --- the newspaper box and the display rack near a checkout counter. Other external advertising exists (and would have to be paid for). And, of course, a newsroom often markets itself best by telling its audience --- in this case, the newspaper readership --- about the online activities. In-house advertising is phenomenally effective and important. Lose the paper and you lose that advantage.
6. No matter how journalists might think otherwise, there are substantial overhead or central costs to their operations: technical backbone to ensure they can gather and distribute, finance operations to ensure they're paid, human resources to ensure they're treated properly, legal to ensure they're compliant with authorities and laws, and on and on.
7. While it's true that an online-only newsroom would lose many editing and design functions of a paper, that's a minor measure considering the expense necessary to create a properly digitized newsroom (video, interactivity, moble, etc.)
It's naive to think of the newsroom as a breakaway republic that can live on its own. So, hold the trumpets a little bit. There are still steps to go before anyone has the credibility to suggest the printing plant could be shuttered.
