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Nov. 9, 2009, 12:46 p.m.

NYT’s Keller: “What you can do with less, is less”

When I was in San Francisco for ONA, a kind reader offered a blunt critique of my reporting: “You know, every time The New York Times sneezes, it isn’t news.” He’s right, and yet, here’s another post in which the Gray Lady clears her nose: Bill Keller, the Times’ executive editor who’s becoming a regular around here, delivered a newsroom address on Thursday that touched on layoffs, efficiency, and charging for NYTimes.com.

“The idea that you can do ‘more with less‘ is, in my view, one of the four great lies,” Keller told his staff. “What you can do with less, is less. But if you are smart and careful, you can limit the harm.” To that end, Keller said the Times is looking to streamline its copyediting and page design. He ruled out eliminating sections and said layoffs, if necessary, would be based on merit.

On the digital front, Keller said again that a decision on charging for the Times website would come soon. He described the company’s predicament:

First of all, the website earns a lot of money from advertisers — and that, by the way, has started to grow again at a healthy rate. If you charge readers to reach your content, some of them will stop coming to the site. If enough of them stop coming to the site, you lose more in ad revenue than you gain from direct payments. That’s a risk that can be minimized, but it can’t be ignored.

If you DO decide to go to a pay model, there are many intricate questions about how you charge, how much you charge, whether you do it alone or in some partnership with other papers, and how fancy a technical infrastructure you build.

It would only be natural for the Times Co. to consider every option, but that’s the first time I’ve seen anyone there mention a “partnership with other papers” — like, say, Steve Brill’s Journalism Online — as an option. Also, the Times has more than 70 blogs, and Keller said those “consuming considerable effort and expense with little reward” might be cut.

Here’s a full transcript of Keller’s remarks, which was posted on an internal Times server and passed along to me. Don’t miss Keller’s knock on the newly redesigned CNN.com, which he said “has hardly any news”:

Good morning. Welcome to another episode of Throw Stuff at Bill. This year we’ve added one innovation to the Throw-Stuff methodology. As usual we’ve offered foreign and domestic bureaus the ability to join us by conference call, but this year they have the ability to e-mail me questions in real time, and the questions will pop up on the laptop in front of me. Whether I have the ability to find the incoming questions, let alone answer them, remains to be seen.

In a fairer world, this would be a time for celebration. Since we last met here, The Times has won just about every prize in the world of journalism — for the brilliance of our reporting and photography, for the beauty of our graphic design, for the ingenuity of our online storytelling. We have put important but invisible subjects onto the public agenda — the dangers of distracted driving, for instance, and the alarming rates of brain damage in football, to cite two examples where our work has mobilized a government response and may well end up saving lives. We have lived up to our obligation to hold powerful institutions accountable, and to help our readers navigate the complications of life in hard times. Our reporters have unearthed scandal from Washington (the Ensign family, for instance) to Afghanistan (the Karzai family). On the big running news stories of the day — the health care debate, the attempts to rescue the economy, the strategy in Afghanistan, the political ferment from City Hall to Capitol Hill — we have been the great indispensable source. In short, when so much of our competition is in retreat, our journalism has remained astonishingly good, and readers know it.

Almost miraculously, twice this year we have had correspondents freed from captivity in Afghanistan — although in one case the rescue came with a heartbreaking price — and we have used those experiences as opportunities to bear witness. David Rohde’s seven-month hostage ordeal became a gripping narrative of life inside the place we’ve come to call Talibanistan.

We’ve launched a new local news project in the San Francisco Bay Area, with another on the way in Chicago — experiments that may become an important revenue source, but in any case are a sign of new life in print. All of this and much more should be abundant cause for pride.

But the subject that looms over all of us is the impending loss of 100 jobs — with the anxiety and sadness that brings in the short run, and the fear it arouses about the long run. So let me focus today on four questions that I’ve been hearing around the newsroom — and then turn to you for anything else that’s on your mind.

The four questions are:

Why now?

What’s the plan?

Will we get some relief by charging for our journalism online?

And, where will it all end?

Let me acknowledge up front that I operate under three constraints. For starters, I can’t foresee the future. There are also some things in the here and now that I just don’t know. And there are some things I know but can’t say without calling down the wrath of our lawyers. Within those limits I will be as candid as I can be, and I trust that in return you’ll regard this as a discussion within the family, not material for your Twitter followers or Facebook friends.

First, why now? Why, after pay cuts and furloughs that were supposed to carry us through the hard times, are we suddenly talking about buyouts and layoffs in 2009?

Of course, the possibility of another staff cut has hovered over us, really, since the last staff cut, but none of us expected it to happen before next year, and all of us hoped that with the recession bottoming out we had a chance of avoiding a staff cut altogether. Yet here we are.

The fact that we were suddenly faced with buyouts and layoffs does NOT mean that the business of the company has taken a sudden turn for the worse.

On the contrary, the national economy has begun growing again, and, as Janet and Arthur noted two weeks ago in their report on the 3rd quarter results, we have the first, tentative signs that advertising may be stirring back to life, modestly in print and more significantly online. Things seem to be looking up a little. But they are not looking up enough to support a newsroom of 1250 journalists in the years ahead. While advertising may rebound, there is still a lot of advertising that is unlikely to return to the levels of our financial heyday. Look at it this way: Advertising used to account for about 70 percent of the revenues of The New York Times. That number is now approaching 50 percent. We’ve made up for some of the lost advertising by increasing the price of the printed newspaper and by cutting costs, but there’s a limit to how deep you can cut and how much you can demand from your customers. Thus the decision to cut 100 jobs — to create a newsroom staff level that we hope will be sustainable for the long haul.

Once the decision was made to have a staff cut, the reason for doing it now rather than waiting until next year amounted to a simple, hard fact of life: under the Guild contract, anyone who is working here on January 1, 2010, is entitled to all of his or her paid vacation. By making the cuts before the end of the year, the company saves those costs. In practical terms, that means if we wait until next year, to get the same saving we would have to cut more jobs than the 100, probably another ten jobs. Certainly, I’d rather make these cuts later. In fact, I’d rather not make them at all. But if we have to face this, I’d rather face it and get it over with, and move on.

Next question: What’s the plan? How do we shrink the newsroom staff by 100 jobs? Much as we hoped to avoid it, we have not had our heads in the sand. The masthead has been at work on a variety of contingency plans to minimize the damage to a great news report in the event we had to cut staff. The idea that you can do “more with less” is, in my view, one of the four great lies. (You can Google the other three, starting with “the check is in the mail.”) What you can do with less, is less. But if you are smart and careful, you can limit the harm.

We’ve had a lot of experience in cutting budgets — and there are basically three things you can do:

First, you look for any slack in the system, any way to do what we do more efficiently, more economically. In the early days, when we began imposing tighter discipline over management of the newsroom, that meant booking travel through Expedia rather than American Express, it meant looking for cheaper meals and lodging, it meant somewhat less frequent moves of correspondents from one bureau to another, it meant having correspondents work from home rather than commuting to an office. We now run a much tighter ship than we did a few years ago, which has enabled us to save money without compromising coverage.

This time, in our quest for new efficiencies, we’re looking hard at how we move copy — from reporter to publication, whether in print or on the Web. We suspect we can save some slots by streamlining the process.

Could we for example combine some of our copy desks and save a few FTEs by gaining economies of scale and scheduling without compromising the rich, specialized expertise that resides in our cadre of copy editors? Or consider how pages get made. We have skilled designers who draw our pages, paginators who execute those designs and other production staffers who calibrate the tone and color of the pages. We’re looking at whether we can streamline some of that work. Susan Edgerley, Fiona Spruill, Patrick Laforge and Allan Flippen are deep into a study of how we handle copy, and I expect to reach some conclusions in the next week or two. Those are the kind of questions we’re examining, under the general rubric of doing things more efficiently.

Besides looking for slack, you look for things you can stop doing, or things you can do less often. Are there things that aren’t essential to the news report, features that we can live without? In the early days of newsroom cost-cutting, that meant things like stock tables and the Sunday TV book — essentially lists of raw information that were easily accessible on the web. More recently it meant doing away with the City weekly and the regional weeklies. Of course, along the way we have created new things, too. The regionals and City section gave birth to the new Metropolitan section, with zoned pages for the suburbs, and I don’t think I’m alone in regarding it as a tremendous success.

This time, one thing we are doing is taking a close look at our long roster of 70 or so blogs and our online verticals, as we call our focused packages of online content. We think we can save some slots there. Many of our blogs serve a valuable journalistic purpose. Many draw a lot of traffic to the website. Some of them are experiments that deserve more time to prove themselves. We don’t want to lose the inventiveness we have achieved by letting a thousand flowers bloom. But if we find instances where a blog or a vertical is consuming considerable effort and expense with little reward, we’re prepared to do some pruning.

In the days since we announced the plans for a staff cut, I’ve heard some speculation about other things we might be targeting. Since Metro took a hit last time, my friends in Metro wonder if they are in for another round of particular pain. I’ve heard similar rumbles from writers and editors in the features sections — Dining, Home, Travel, Styles and the rest. One of the armchair experts quoted by the public editor wondered why we don’t eliminate the Sports section. I’d like to be as clear as possible: none of those things is on the table. I can’t think of a better reminder of how much our readers count on Metro than our deep and distinguished coverage of this week’s election campaigns, or a better reminder of what we bring to sports fans than our dazzling coverage of the World Series.

I don’t know who will take the buyouts, and I don’t want to suggest that any department is completely immune, but believe we can get to 100 slots without anything so drastic as reducing Metro coverage or downsizing the Sports section — and I believe it would be unwise, at a time when we are asking readers to pay a premium price for our work, to give them conspicuously less of it. Indeed, that’s a point of view you will find echoed enthusiastically by our friends on the business side, who understand that we are more than ever dependent on satisfied subscribers for our revenues.

And, by the way, I think it may be time we stopped referring to sections as “core” or “not core.” The newsroom is a more complicated ecosystem than that. Consider this: although we are a national newspaper, New York is our biggest circulation area, a hugely desirable market for advertisers, and, you might say, our soul. That underscores the importance of Metro. But it’s not just about Metro. Covering New York is the work of Bizday reporters on Wall Street, of our theater, music and art critics, of our fashion reporters and our Dining and Real Estate sections. Folks, we’re all in this together.

So, you cut spending by getting more efficient, by shutting down things that are not essential — and, frankly, by looking for people who, for one reason or another, are not pulling their weight. This is not a newsroom of slackers; we recruit selectively, and we have gotten pretty good at managing out people who don’t live up to our high standards. But when we are forced to cut staff, we look at performance.

As you know, we have offered voluntary buyouts, and I’d be relieved if 100 of you saw a buyout as being in your interest. But if we do not get enough buyout volunteers, and we do have to resort to layoffs, let me be very clear about one thing: we intend to use merit to decide who is laid off and who is not. Nobody in the newsroom is going to get laid off solely because they lack seniority, despite what you may have heard. Our contract with the Guild allows us to go out of seniority and make cuts on the basis of merit. That’s what we did last time, and it will be my priority this time.

One final point on coping with these cuts. This is a cut of about 8 percent in our staff. But some of that lost manpower will be offset because we will not be doing furloughs next year. We’ll each be working 10 more days next year than we did this year. I leave it to you whether that is a blessing, but it will somewhat ease the strain of losing so many people.

The third question that hangs over the newsroom is, what about the website? When will we have a new business model for our online journalism? Briefly put, what is the right mix of advertising revenue and subscription revenue to build the strongest business on the Web?

Jill and I have spent a lot of hours with our colleagues from around the building, including Arthur and Janet, who will make the final decision. I don’t think there’s a variation we haven’t considered, a competing website we haven’t studied, a scenario we haven’t run through a rigorous analysis. It’s taken longer than some of us expected, because, simply put, the answers aren’t as obvious as some people think.

First of all, the website earns a lot of money from advertisers — and that, by the way, has started to grow again at a healthy rate. If you charge readers to reach your content, some of them will stop coming to the site. If enough of them stop coming to the site, you lose more in ad revenue than you gain from direct payments. That’s a risk that can be minimized, but it can’t be ignored.

If you DO decide to go to a pay model, there are many intricate questions about how you charge, how much you charge, whether you do it alone or in some partnership with other papers, and how fancy a technical infrastructure you build.

I can assure you that we’ve covered a lot of ground, and I don’t think you have very long to wait for an outcome. We are indisputably the leader in quality online journalism, and, as the leader, we can afford the time to get this right.

Fourth and last on my list of preemptive questions: will we make it?

I confess to being an optimist by nature, but I’m no Pollyanna. I don’t kid myself that advertising will rebound to the billion-dollar levels of five years ago, or that we can count on digital advertising growing at 30 percent a year again. I don’t think this will be easy. But, yes, we will make it.

You’ve all heard my riff about supply and demand — the persistent, even growing demand for first-rate journalism, and the sadly dwindling supply. That’s no less true, and it is the bedrock on which my own optimism about this place is built. The demand for our work is evident in the print subscribers who pay good money for the glory of the daily New York Times — and who stick with us through price increases and their own economic hardships. It is evident in the floods of visitors to our website — numbers we believe to be much higher than the 20 million monthly uniques counted by Nielsen.

As for the diminishing supply of real, reported news that matters, every week brings another example. Here’s one that’s fresh in my mind. The other day some of us spent half an hour looking at CNN’s redesigned website. It is the second most heavily trafficked online news site. The redesign is cleaner and brighter. Just one thing: It has hardly any news. On Tuesday, when CNN television was treating Election Day with the usual bells and whistles, the home page of CNN.com did not seem to be aware that there was voting going on. The most striking news story on the page had the following headline: “Canadian folk singer killed by coyotes.” (Now, if it had been Joni Mitchell, or Leonard Cohen.…)

A lot of the people predicting (and in some cases unabashedly yearning for) the death of newspapers overlook the simple fact that a recession lowers the tide for all boats. Daniel Gross put it nicely in a contrarian essay last week on Slate:

“In case anybody has forgotten,” he wrote, “we’ve had a deep, long recession, a huge spike in unemployment, and a credit crunch. Consumers have cut back sharply on all sorts of expenditures. There are plenty of members of what I call the 40 percent club: businesses, many tethered to finance and credit, that have seen sales plummet by nearly one-half. These include automobiles, homes, luxury apparel, and diamonds. Many other components of consumer discretionary spending — hotels, restaurants, air travel — have fallen off significantly. Do we draw a line from trends over the last few years and declare that in 15 years there will be only a handful of hotels? I’m not sure why we would expect consumption of a purely discretionary item that costs a few hundred dollars per year not to fall in the type of macroeconomic climate we’ve had.

“Especially when you consider that rather than discounting the product, many newspapers (and magazines) have been jacking up prices aggressively.…

“This,” he concludes, “is the new emerging model — cutting costs, raising prices. It may still fail in the end. But we shouldn’t act as if the online-only crowd has it all figured out. Every month, several million Americans pay to have newspapers and magazines delivered to their homes — a trick most online publications have yet to pull off. In fact, in some regards, print-online hybrids like newspapers and magazines have outperformed online-only publications. The Web operations of the New York Times, Washington Post, and Wall Street Journal aren’t exactly slouches when it comes to selling online ads. And as poorly as the stock of the New York Times has performed over the past decade, most people would have preferred owning it to the stock of Salon.com, or TheStreet.com.”

Maintaining the excellence of the news report has always been a priority of the newsroom and a commitment of the Ochs-Sulzberger family. Because of the growing dependence on circulation revenue, it is more than ever a business imperative as well as a journalistic mission. If we cut the staff to the point where our readers see quality in decline, they will no longer be willing to pay a premium price for it. That’s not just an argument that I will make. It’s an argument the business side will make more passionately than ever.

To that I would add that the recession WILL end, because they always do. Consumers WILL resume spending, maybe not at the profligate bubble-fueled pace of the ’90s, but they will spend. Advertisers WILL advertise and a lot of them will continue to see huge advantage in advertising to the educated, discerning, successful people who read the NYT, in print AND online.

And, last but not least, on my list of reasons for optimism is that we have demonstrated, as a company and as a newsroom, a tremendous ability to adapt, invent, including the game-changing, game-SAVING decision to make The Times a national newspaper, including the luscious franchise of the T magazines, including the font of journalistic invention that is our website, including a cascade of ideas from the newsroom in recent months.

As you know, Jill and I have spent a lot of our time the last few weeks immersed more than ever in our digital journalism, and it is invigorating to spend time with the amazingly inventive producers, product managers, software-builders and others — many of whom have chosen to be at this place rather than in some online startup because they believe in the work as much as those of us who come from the world of ink on cellulose.

Most of you know me well enough to know that standing up in front of crowds is not my VERY favorite thing to do, but there is one reason I relish these occasions. They give me an opportunity to say something that doesn’t get said nearly often enough, and it is this:

The value of The Times, ultimately, is the people here who, through thick and thin, manage to create journalism that is fearless, intelligent and rich — literally in a class by itself. Even during these tense weeks since we announced the news that we would have to have another round of staff cuts, just look at the glorious news reports we have published, day by day, hour by hour. I’d like to end with a simple but deeply felt thank you to everyone here who works their hearts out to create and support the singular mission of The New York Times. It’s an honor to work alongside you.

Now, I welcome your questions or comments.

POSTED     Nov. 9, 2009, 12:46 p.m.
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