Wednesday, December 9, 2009

Rupert Murdoch Plans a NY Times Killer: is the LA Times Next?

The Observer notes that Rupert Murdoch is planning a NY Times killer, with a "New York" edition of the Wall Street Journal. Planning on spending $15 and using the services of the former New York Sun editor, John Seeley, the paper will compete directly with the New York Times. Money quote:

“You could drive a truck through the space between the wonderfully titillating tabloids and the perceived self-seriousness of The Times,” said Stefan Friedman, a public-relations specialist at KnickerbockerSKD. “There is a need and a want.

“With the elimination of the metro section, space in The Times is extremely competitive,” he continued. “There are maybe eight stories in the metro section each day. Take away breaking news and you’re down to half that. That’s where you can reach lawmakers, and with the area being so crowded, [The Journal has] a real opportunity from the PR side.”

With the submission of two links from "the Awl" by a reader (who I will keep anonymous unless he/she wishes otherwise), I wonder if the LA Times is next?

The first link shows the LAT circulation as an "absolute horror show." The second link shows how badly magazines have declined both in advertising pages and circulation. The Financial Times also has a story citing figures of 383 magazines closing this year. As the accompanying picture from the print version (sorry, unlike the WSJ the FT does not provide graphics with their stories that appear in the print version) shows, revenues are down for each sector of advertising and for each forecasted year, though it would appear that forecasts call for digital to be up a bit, but not enough to cover the declines in overall revenue. The year 2007 had nearly $15 billion in revenue, compared to forecasts for 2010 of closer to $10 billion.

It is clear that the advertising market will not bail out the LA Times anytime soon. So will Murdoch make a move?

It would be consistent with what he knows: newspapers. The WSJ is printed locally in the LA basin. It can easily compete with the LA Times because the LAT has a terrible, politically correct paper that neglects local stories (Mayor Tony's affairs with developers, businesswomen, and reporters, the local ACORN scandals, the scandal involving Mark Ridley-Thomas, the Obama tape of his attendance at the Rashid Khalidi dinner, and more). The LAT does not even bother to cover Hollywood, much less the basic economics of the DVD and TV sales that drive studio profitability. Readers of the LA Times would be astonished to discover that Redbox and piracy threaten the studio business model.

Can Murdoch make an LA Times killer? Yes, easily. The lack of competition, and the potential readers, even with the economy in the dumps and White flight (Mexican origin people read mostly Spanish language newspapers if they read them at all), make this business case fairly positive. There are millions of readers not served by a newspaper rivaling the NY Metro area in size and wealth. Despite the negatives of print, the sheer ease of use of a newspaper, particularly with the breakfast table, or various waiting areas, or so on, make it valuable and desirable. The WSJ alone (see the link above) has done fairly well in making itself a "national" newspaper. Newspapers can be read in almost any situation, and often have handy information, such as sports schedules for local teams on TV and radio, and other things that add value. [One of my pet peeves about the LA Times is the lack of daily radio listings, including station name, format, and frequency, that the LAT used to print but dumped along with stock tables in the 1990's. In LA's fast-changing radio line-up, you'd think this would be a no-brainer, but the Times instead challenges readers to simply surf the frequencies themselves. The little things that add value to the paper went years ago.]

The only question is people. Can Murdoch find the people to create a local, LA version of the WSJ? The NY Sun provided the template and the people for the NY version, and Murdoch has shown he can take a decade of losses (Fox Broadcasting cost around $1 billion in net losses from start-up in 1986 through 1996 in operational losses, yearly) for a property that can make money long-term. But as his MySpace debacle shows, getting the right people to run it can be an issue. [Murdoch bought MySpace for about $580 million or so, and it quickly lost buzz and users to Facebook, which now outnumbers it by 350 million users to about 100 million users.] Unlike NY, there are few people in and around LA used to running a newspaper who can provide something different than the failed, two decade long decline of the LAT.

I am skeptical of the idea that a news-reader as outlined in the Financial Times article will be competitive with the price and ease of use of a newspaper any time soon. Lighting, battery, costs of the device, ruggedness, and so on are all issues, as is paying something like ~$200 or so for a reader and then daily fees for a e-version of the newspaper or magazine. Particularly in this economy. The potential profits of a LA version of the WSJ must be tempting to Murdoch and News Corp.

But there is the question of who will run it? Local bloggers like Mayor Sam's Sister City, or Luke Ford, do excellent reporting, but managing a newspaper with hundreds of employees, and hard print deadlines, is another matter, particularly balancing that with middle class tastes. The latter is probably more prevalent in bloggers than the market-failure newspaper management, but getting a paper out on time and on budget with quality is pretty rare and requires experience. As always, it comes down to people.

The true tragedy of newspapers is that collectively, they have almost no one who has both the skills needed to manage the production of a newspaper with the middle class tone of the content. Call this one of the many casualties of the "SWPL"-ification of the elites. Ladies and Gentlemen, I give you the New York Times Holiday Gift Guide for People of Color. Yes. It really exists.

Somali fashion, do-it-yourself henna kits, children’s books that draw inspiration from the lives of Barack Obama and Sonia Sotomayor: it’s not hard to find gifts created for and by people of color this holiday season. Here are some possibilities.

The sad thing is, this could have easily run in the LAT. Without importing ex-NY Sun editors, who will run a LA version of the WSJ?

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The LA Times and Green Jobs: Stupid, Lazy, or Politically Correct?

The LA Times on its home page had this story, by, with the headline "Job growth in California is going green" and the subhead "From January 2007 to January 2008 green jobs increased 5% while total jobs declined 1%."

The SF Gate version of this story noted that "Green jobs just 1% of total in California" and that furthermore, the report cited does not take into account jobs lost during 2008-2009. [ is the web version of the San Francisco Chronicle.] The only question is, was the LA Times reporting stupid, lazy, or simply terminally politically correct.

The LA Times story itself, read the whole thing, seems essentially a re-write of the Press Release by Reporters are notoriously lazy, never more so than in the present day, and the dirty little secret about most of the content in the major newspapers is that most of it is simply re-written (or not) of press releases from politically correct lobbying groups.

The core of the (brief) LA Times report by Hsu is that "green jobs" (which include things like carpentry and electricians) "grew" an astonishing 5% between January 2007 and January 2008, while the overall California economy lost 1% of jobs during the same period. Money quote from the LAT:

The industry is still too small to drag the state out of its jobs slump but could at least nudge the economy toward recovery.

"Green jobs are not a panacea," said Noel Perry, a venture capitalist and founder of Next 10. "But this is the foundation of the green economy, and all the trend lines are up."

In contrast, the SFGate story is solid. Money quote from the reporting:

But taken together, those jobs represent less than 1 percent of employment in the state, according to the report's authors. Green industries have great promise for employment, but they haven't delivered yet.

Reading the reporting, you can learn that report has implications for California's "Green" mandates in counting the jobs that (were) already there, but notes that they could have been destroyed in layoffs during 2008-2009. [They probably were, note how carefully the Next 10 Report avoids any 2008-9 figures, probably because they told a different story.] The Bay Area has mostly energy-generation jobs (7,003), tied to Bay Area research universities, particularly Stanford and Berkeley. The LA area has 1,072 people working on alternative fuels and vehicles. Nearly every job requires massive and continuous federal subsidies, the SFGate article noting that Bay Area solar panel manufacturer Solyndra Inc opened a Bay Area facility after getting a $535 million federal loan guarantee. A careful reader will note that "Green" requires federal "green" i.e. loan guarantees, grants, money to research universities, and employed less than 1% of the total jobs in the State before the recession really hit.

Indeed, the Next 10 report notes that California jobs "dropped" by 1% total while "green" jobs increased by 5%. What neither the LAT nor SFGate note, is that in actual fact, according the Bureau of Labor Statistics, California's jobs increased during that period for a total of 183,000 jobs, or 1%. [Without seasonal adjustment. With seasonal adjustment the jobs increased about the same amount, or 241,000 jobs]

Its hard to credit the report's accuracy when the basic data about California's jobs show an increase not decrease (for Jan 2007 to Jan 2008), and further that this can be determined by five minutes reading on the BLS website.

What then, to make of the LAT reporting? Lazy, stupid, or politically correct? Likely, a combination of all three. Reporters are lazy, and will take anything that is perceived as "authoritative" and simply quote it verbatim. You can see reporter Hsu simply quoted the press release, not even bothering to question any assumptions. Because it came from authority, and because the reporter did not bother to think, or even put any effort into the whole thing. SFGate's David R. Baker, at least noted for his readers the obvious (many of the "green" jobs could have been lost during the recession) and that they were in total less than 1% of the total jobs in California during that period. That simply put, "Green Jobs" will NOT employ enough people, ever, to replace the jobs lost during the recession. Indeed, though Baker does not say so (constrained by his own PC-straightjacket), the careful reader can note that the jobs created depend largely on federal funding and consist mostly of White Elephant make-work jobs at research universities out of "Ghostbusters," or unprofitable manufacturing subsidized by taxpayers at enormous expense. Nothing "Green" consists of growth opportunities for high-revenue firms.

Neither Baker nor Hsu ask, moreover, just who is Noel Perry and what does he want from this "report" (which we can see is inaccurate and misleading). A few minutes of Google reveals that Perry is the founder and manager of Baccharis Capital, with interests in various Green Travel and partnerships with REI. A reasonable person might ask, "does Perry have business investments that could gain money by public policy at the Federal and State level directed to Green tax expenditures?" This question was never answered by either Baker nor Hsu.

To be reasonably informed about "green" tax spending (either tax breaks or bonds or grants or all of these in combinations) requires an understanding of how many green jobs there are (answer: 1% of total California jobs, something you would know from the article but NOT the LAT) and what the cause of growth in the "green" job base really is. For the latter, the SFGate article will provide the careful reader with needed information, but only indirectly, so imprisoned are the reporters by PC dogma. Job growth in "green" sectors is almost entirely based on subsidies, and most of it is in various think tanks and universities. Lastly, it is reasonable to enquire just who benefits from the report, particularly the man funding it. Certainly there would be tremendous skepticism from any report issued by the NRA, or Focus on the Family, or Heritage Foundation, by any reporter covering the story. But because the report is politically correct, LAT reporters simply re-run the press release under their byline.

I will note in passing that Baker was not innumerate, quickly grasping that despite the 5% increase in "green jobs" over the period it was a tiny fraction of the overall employment in California. Since neither the report nor the press release itself mention the size of California's jobs during that period, it seems Baker spent a few moments on the BLS site to quickly apprise himself of the number of jobs (about 18 million) in California Jan 2007-Jan 2008. Hsu by contrast seems innumerate, unable to understand that a greater increase in job growth is fairly meaningless with such a tiny fraction of the job market. The "strength" of California's Green economy that she quotes is federal spending to prop up the equivalent of Dr. Venkman in "Ghostbusters." And the LAT wonders why circulation continues to drop like a rock.

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