Online Newspaper Could Thrive in This Market

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Online Newspaper Could Thrive in This Market

#18 NEW MEDIA

The Los Angeles Times can be justifiably proud of having won five Pulitzer Prizes this year, an affirmation of how the paper has improved under the stewardship of Editor John Carroll. Indeed, the Times is a much more complete newspaper these days, with its renewed emphasis on investigative reporting and the ability to throw scores of reporters and editors onto important breaking news, as it did last year in covering the wild fires (one of its Pulitzer wins).

Not that the Times has a monopoly on local media. Los Angeles is home to any number of daily newspapers and weeklies that make money in selected markets and, on occasion, break important stories. The Daily News, which is run by the Los Angeles Newspaper Group, a unit of MediaNews Group Inc., remains an important voice in the San Fernando Valley, while the Daily Breeze in the South Bay has provided aggressive coverage of local issues, most recently the ongoing inquiries into contracting policies at the airport and port.

But the Times dwarfs every other media property in Los Angeles and that has marginalized other voices in town. Many journalists at the Times believe that a subject of local interest does not really become newsworthy until it hits the pages of their newspaper and as a practical matter in terms of the attention a story receives, they are generally right.

The more competition, the better. And while L.A.’s assortment of magazines and alternative weeklies are vital sources of information, what’s truly needed is another daily paper.

Not an easy prospect. There seems little appetite at MediaNews, which also owns several dailies in the San Gabriel Valley, as well as the Long Beach Press Telegram, to take on the Times throughout the entire region. Same with Freedom Communications, parent of the Orange County Register, or other major media companies.

Ever since the death of the Los Angeles Herald-Examiner in 1989, there have been occasional efforts to start up a daily. Most recently, former mayor Richard Riordan toyed with the idea of launching a five-day-a-week paper to compete with the Times he had a lingering resentment toward the daily after his failed gubernatorial bid but Riordan quickly realized such a venture would be financial suicide. He then looked at starting a weekly paper when the recall movement heated up and he got back into politics. Now, he’s education secretary in the Schwarzenegger administration.

Unless someone out there is willing to lose tens of millions of dollars in start-up costs (and then lose millions more, year after year), there is scant prospect of a traditional daily newspaper for Los Angeles. The costs are just too high (production, distribution) and the opportunities for ad revenues too limited.

David M. Cole, editor and publisher of NewsInc., a newsletter on the newspaper business based in Pacifica, Calif., estimates that an investor would need between $100 million and $200 million to battle Tribune Co., parent of the Times and the third largest newspaper chain in the U.S. “No, it won’t ever happen,” he said.

One alternative to a traditional daily, however, would be a newspaper on the Web. After several years of fits and starts, the Internet is finally providing homes to some successful advertising-based business models. And since a Web-only product would bypass many of the largest start-up costs for a new publication, revenue goals would not have to be as ambitious.

Los Angeles, home to significant wealth, has no shortage of potential investors who might be interested in such a venture. The costs would run well under $5 million. The key for the new publication would be gaining widespread visibility and providing news and information before the Times and other papers get it in print.

Up until now, newspaper Web sites have been reluctant to provide expansive same-day coverage, out of concern it might supplant what appears in the main paper the following day. While world and national news are widely available on countless Web sites and portals, there is limited, if any, information about a council vote or a big fire that same day.

In addition, a locally oriented Web newspaper could become a clearinghouse and honest broker for opinions on community issues. It could also be a repository for studies, speeches and other pieces of information not easily transferred onto limited amounts of newsprint.

None of which will lessen the Times’ dominance, of course. With a circulation of around one million and a visibility that extends around the globe, no new local newspaper, electronic or otherwise, is likely to challenge the paper. But more voices need to be heard in L.A. And there may be some money to be made in the process.

NEW MEDIA

Proposal: Daily Web newspaper to compete with the Los Angeles Times

Obstacles: Capital expenses, gaining visibility, limited advertising base

Cost: $2 million to $3 million

Time Frame: One to two years

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