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.