Spending Less, Risking Less in a Fast-Changing Venue

The Los Angeles Times was a pioneer in cyberspace.

In October 1984, The Times’ parent company, Times Mirror, launched Gateway, which provided news from The Times as well as advertising, shopping and banking services, directly to home computer users in Los Angeles and Orange counties. But Gateway never attracted more than 3,000 subscribers, and after 15 months of commercial trials and what securities analysts estimated was a $15-million loss, Times Mirror shut it down.

In October 1994, The Times launched TimesLink, an online, interactive service offering news, information and transaction services over the Prodigy network. TimesLink was named the best online publication of that year by Interactive Publishing Alert, an electronic newsletter that tracks trends in online publishing, and within eight months, TimesLink had 20,000 subscribers.

But like many newspaper companies that experimented with early electronic newspapers, Times Mirror decided that the Internet offered a much better opportunity for online publication than did Prodigy. In December 1995, TimesLink was closed.

Now, like most major newspapers, The Times has its own Web site, launched in April 1996. But so far, The Times’ latest venture in cyberspace has been considerably less ambitious than those of most of its competitors.

The Times has 22 people on its online staff. The Washington Post, Chicago Tribune and Houston Chronicle, among many others, have online staffs of 30 to 40 each. The New York Times has 60, the Wall Street Journal 75 and USA Today 83. The New York Times, Wall Street Journal and USA Today each has more than 40 news and editorial staffers; the Los Angeles Times has eight.

At most major papers, the editor in charge of the online edition does that job full time. But Terry Schwadron, deputy managing editor of the Los Angeles Times and supervisor of the paper’s Web site, has divided his time between that job, being editor of the Life & Style section and overseeing the paper’s editorial library, among other chores.

“Somewhat to my chagrin, this is not something we are pursuing with great gusto,” Schwadron said in an interview earlier this year. “It’s discouraging. We should be getting people on a learning curve. We don’t know how to deal with sound, how to tell a story with this new medium, how to deal with the two very different cultures of online and print.

“Business considerations are important at all papers,” Schwadron said, “but here . . . it may be the only consideration. . . . I’m often the only voice for journalism.”

Although he is now somewhat more optimistic about the paper’s commitment to its Web site, and top Times executives deny that money is their only concern, it seems significant that although most newspapers call the division under which their online publications operate either “electronic media” (New York Times) or “interactive media” (Chicago Tribune) or “the interactive division” (Wall Street Journal), or “new media” (Boston Globe), the L.A. Times Web site is in the paper’s “new business development” department.

The head of that department, Robert Brisco, senior vice president for marketing and new business development at The Times, says the paper is involved in several other Internet ventures--among them Hollywood Online (a Web site covering the entertainment industry), CareerPath (a classified ad service for employment) and Listing Link (a real estate sales site)--and is reluctant to spend too much money on any single project in so new a medium.

Other major papers are also experimenting with a variety of online ventures, though--Tribune Co. in Chicago is spending $15 million to $20 million on interactive ventures this year, far more than Times Mirror--and Brisco concedes that The Times has been less willing to take risks than have many of the other companies.

Brisco says that although other newspapers are spending more money on their Web sites, they are also losing more. “We’re spending less because we want to lose less,” he says. “We are somewhat cautious in a world that’s moving so fast.”

Richard T. Schlosberg III, publisher of The Times, says the paper is intentionally being “extremely prudent.”

“The move toward the Internet is inexorable, and I have great respect for all those others [who are investing more in their online newspapers]. Reasonable people can differ on the appropriate levels of investment at this stage. We have made what we feel is appropriate at this stage for us.”

The Times is spending about $2 million on its Web site this year--a relatively moderate investment by major online newspaper standards--and the paper has no plans to supplement these funds by charging for access to its main online site. The Times does charge for access to stories in its archives--$1.50 for each downloaded story--and it charges $15 a year for its crossword puzzle.

Because the Internet is evolving so rapidly, Brisco believes that The Times can “dial up or down very quickly” if it appears that the market is ready for a more robust online newspaper.

Many other newspaper executives do not share that view.

“We think getting in big early gets you a leg up on the learning curve. Then you’re ready when the wind comes up,” says Bob Ingle, president of new media for Knight Ridder Newspapers, which is widely regarded as the leading newspaper company in technological innovation.

The Times Web site is made up largely of material that was printed in that day’s newspaper, although it is updated with material from Associated Press several times a day.

But any presence on the Web has certain benefits.

“We produce a good newspaper, and this allows us to take it where the delivery trucks can’t,” Schwadron says.

Slightly more than half the users of latimes.com come from outside California and 15% are from outside the United States. Like editors at other newspapers whose Web sites draw heavy usage outside their local circulation area, Schwadron and his bosses at The Times see this as an effective, low-cost way to enhance the reach and reputation of their paper.

Moreover, Schwadron says, “I am quite proud of what we have been able to do, given the financial realities.”

Although cyberspace professionals are more critical of The Times’ site than of those produced by most of the other big-name dailies--and several smaller papers as well--latimes.com did finish seventh among the top 50 online papers chosen in March by more than 30,000 readers of the American Journalism Review “News Link.” The Times Web site was also the eighth most heavily visited of all newspaper sites.

In both polls, The Times finished behind the New York Times, Washington Post, Wall Street Journal and USA Today.

The L.A. Times print edition has “good journalism in big amounts, strong talent and local resources,” Leah Gentry, who helped launch the Chicago Tribune Web site, said in an interview earlier this year. “You could knock everybody out of the water and become the preeminent site if you chose to. I’m surprised you haven’t done more.”

In the last couple of months, The Times has begun to show signs of wanting to do more. Significantly, the paper just hired Gentry to be the editorial director of its new media ventures, including its Web site.

The Times’ Web site was redesigned in April, and increased advertising and traffic on the site have given the online operation “more credibility within the institution,” Schwadron says. Business executives at the paper now realize that “by beefing up our journalistic and information coverage, we can attract more readers. That will be good for business and good for growing our storytelling abilities as well.”

Schwadron hopes to include more original content on the site soon, and several other online projects are also under consideration at The Times, including more news updates and community information.

Brisco says he plans to launch several of these services before year’s end, beginning with a comprehensive arts, entertainment and recreation listing.