I'm CEO of Newspeg.com, a social news-sharing platform. I've spent 20 years at the intersection of traditional and digital journalism. I've helped to invent ways to read and interact with the news and advertising on computer screens and iPads, and before that, I wrote news stories on typewriters and six-ply paper. I co-founded WashingtonPost.com and hyperlocal pioneers Backfence.com and GrowthSpur; served as editor of Philly.com; taught media entrepreneurship at the University of Maryland; and have done product-development and strategy consulting for all sorts of media and Internet companies. You can read more about me here.
I'm not sure why anybody's surprised. In fact, I'll bet NewYorkTimes.com and WashingtonPost.com (and probably others) can boast of something similar, or close. But it seems to be gospel in a lot of pessimistic circles that online revenue simply isn't enough to support a traditional newsgathering operation, and that that's an insoluble problem.
Hogwash. Online revenue has been rising steadily–even in the current downturn, at some places–and is able to cover more and more of the costs of news organizations, as the LA Times case demonstrates. We're still nowhere near the tipping point at which online revenue can entirely replace print (and the print edition, with its high costs), but we're getting there. It's just not happening fast enough. Newspaper online operations need to move moreaggressively to get past the banner ad and sell new advertising products to new advertisers. The money's out there–they just need to go get it. It's not as easy as selling print used to be.
A year ago, in my Crossing the Chasm white paper, I predicted it would be five to eight years before newspaper online operations could cover the total costs of running fullblown news, marketing and sales organizations. With the economic downturn, that prediction is probably on the low side, unfortunately. And the transition time in between is going to be hellish, as we've already seen. But as the Los Angeles Times disclosure indicates, the trend is in the right direction (editorial cost-cutting helps, no doubt). Newspaper Web sites just need to work harder to get there more quickly.
Update: Jeff Jarvis has more detail from LA Times Editor Russ Stanton, including some very smart things the paper is doing to make its Web site more successful–and to bring more Web culture, thinking and education into that now-paid-for print newsroom. Bravo.