Trouble at the Los Angeles Times: Memo says digital subscriptions way below goal

Troubling news at one of the nation’s top newspapers.

Digital subscriptions at the Los Angeles Times are way below expectations, and leadership, in a memo to staff, said the future of the paper could depend on solving the issue rapidly.

Whether due to unrealistic expectations or editorial and business failures, the Times is nowhere close to meeting its digital subscription goal. The Times had hoped to double its digital subscriptions from just more than 150,000 to 300,000 this year — a number that would have to be doubled again, the memo said, to come close to covering editorial costs. But midway through the year, the Times is nowhere near that number, having netted only 13,000 digital subscriptions in 2019.

In a memo sent to staff on Monday afternoon and obtained by Poynter, Executive Editor Norman Pearlstine and Managing Editor Scott Kraft wrote, “Our future depends on rapid and substantial subscription revenue growth.”

They added, “Performance for the first half of the year … has been disappointing.”

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The memo said that the Times added 52,000 digital subscriptions, but “significant cancellations during the same stretch” left the Times with a net increase of only 13,000. (A current online offer is 99 cents for the first month and $2 per week after that, or about $100 a year.)

Kraft said via email that in June of 2018, the Times had 131,000 digital-only subscribers. As of today, it has around 170,000, he said.

Because new subscriptions are low, the memo said, “Digital conversions are our top priority between now and the end of the year.” The memo described it as “Job One.”

In a phone call Tuesday evening, Pearlstine said, “I don’t think it’s ominous, I think it’s urgency and it’s just that we see a great opportunity and we have to move quickly. I don’t think it’s any secret that any publication that is driving a large percentage of its revenues from print needs to find new products for new audiences delivered on new platforms. If anything, I think after years of neglect and no investment, we just have so much catching up to do. So I don’t think of it as ominous, but I do think it’s important that we get out front after having been behind for so long.”

Pearlstine said he remains optimistic about the Times’ future because of the outlet’s ability to tell stories digitally, such as the highly successful podcasts “Dirty John” and “Man in the Window.”

Still, the memo feels like a depressing blow to the Times, which has added to its editorial staff significantly in the past year and has been riding a wave of mostly positive publicity. It has added more than 125 to the newsroom and still produces a quality product, as proven by a Pulitzer Prize for investigative reporting this year. But adding staff, including several high-profile hires and the much-publicized move of bringing back the food section, has not resulted in increasing readership as much as the Times had hoped.

Monday’s memo went on to say, “Although reaching 300,000 digital subscriptions — our stretch target for 2019 — will be difficult, we remain convinced that we can grow to 1 million subscriptions in the next few years. Transformation will only come with collective effort. That’s how we build a self-sustaining media business.”

The Times’ renewed efforts will include assignment editors from across the newsroom holding weekly meetings to look “deeply into the data from every department.”

Pearlstine and Kraft wrote, “We must not only celebrate our victories, but we must also look critically at areas where we are falling short.”

The memo said the editorial team was not alone in improving the numbers.

“We cannot meet our readers’ high expectations without close collaboration with our business and IT colleagues,” it said.

Pearlstine will turn 77 in October. He took over as executive editor in June of 2018, not long after billionaire Dr. Patrick Soon-Shiong paid $500 million to purchase the paper from the Tribune Publishing Company. One of Soon-Shiong’s mandates was to create content that readers would pay for.

On its website, the Times says it has 1.2 million print readers on weekdays and 2.1 million on Sundays.

Kraft explained in a phone call with Poynter that part of the issue is the Times has spent much of the past rebuilding a lot of things since separating from the Tribune company a year ago, as well as changing content management systems. Ultimately, the content looks better online, but it “also came with all the adjustments the newsroom has to make to make it work.”

In an interview with NBC’s Claire Atkinson in May, Pearlstine said the Times’ digital subscriptions were at about 162,000. He said that number was “large relative to urban newspapers and small, relative to national papers.” The population of the city of Los Angeles is almost 4 million, according to the latest census data. The coverage area of the Times is many more millions of people and includes Long Beach and Anaheim.

When Atkinson asked if the Times was concerned less about paid subscriptions and the business side than making sure there is a strong editorial product, Pearlstine said, “We’re betting that the two have a relationship. We’re very much going to begin by asking what does the Los Angeles Times have license to do, where can we create content that our audience values and is willing to pay for. And we’re much more interested in the number of people who convert to subscribers after spending time with our content than just impressions for their own sake.”

Also on Tuesday, Pearlstine told Poynter, “I think we’ll be proud of where we end up in December. We’re up substantially over 13 months ago, but we’re not up substantially from January.”

As a matter of disclosure, Poynter will honor Pearlstine in November with the 2019 Distinguished Service to Journalism Award. This award is bestowed upon an individual who has championed the goals and craft of journalism through actionable efforts or meritorious service. Pearlstine has been in journalism for more than 50 years as an editor and reporter for such publications as The Wall Street Journal, Time, Forbes and Bloomberg.

Here is the memo Los Angeles Times staffers received on Monday:

Dear Colleagues,

Today we are announcing a vital initiative to increase digital subscriptions to Los Angeles Times content.

Our future depends on rapid and substantial subscription revenue growth. We had hoped to double digital subscriptions this year, to 300,000. (Doubling them again would get us close to covering editorial costs.) Performance for the first half of the year, however, has been disappointing. While we added 52,000 digital subscriptions, significant cancellations during the same stretch left us with a net increase of only 13,000.

Digital conversions are our top priority between now and the end of the year. We have asked Kimi Yoshino and Julia Turner to lead our sprint, and we need the entire newsroom, working together, to make this Job One. Growing digital subscriptions is essential to obtaining the additional resources that we need to continue rebuilding The Times and improving our journalism.

Our initiative builds on the editorial restructuring announced last week. Our plans for expanding our 24/7 News Desk – developed and led by Sewell Chan, Shelby Grad and Shani Hilton – is one part of it. But we need to be looking to convert more subscribers in everything we do, from beat reporting and features to photography, digital design, headline writing and copy editing. In addition, all of us must engage in continuous conversation and reflection about what is working and what is not. We need to agree on projects requiring more attention and, equally important, we need to determine what can be dropped.

All of us must play a role. Quality and quantity aren’t mutually exclusive. Breaking news stories resonate, as do our best enterprise and investigative projects. Stories that entertain and educate – recent reports about seahorses and endangered frogs come to mind – also drive subscriptions.

This week, we shall begin to assemble assignment editors from across our editorial staff for weekly meetings during which we shall look deeply into the data from every department. Those analytics and best practices will be shared across the newsroom. This will only work if we truly collaborate. So there will be ample opportunities for everyone in the newsroom to offer ideas, suggestions and concerns about the strategy. We know that we must take a holistic approach — looking at each coverage area not simply in terms of overall audience but at how we can build a stronger business and get more paying customers for what we produce.

We must not only celebrate our victories, but we must also look critically at areas where we are falling short.

We cannot meet our readers’ high expectations without close collaboration with our business and IT colleagues. We’re happy to report that some recent business-side efforts are beginning to get results. Our significant investment in technology (including Graphene) is improving readers’ experiences. Our investments in data collection are helping us learn from our successes and our mistakes.

Although reaching 300,000 digital subscriptions — our stretch target for 2019 – will be difficult, we remain convinced that we can grow to 1 million subscriptions in the next few years.

Transformation will only come with collective effort. That’s how we build a self-sustaining media business.

Over the last year, we’ve been so proud of all that the newsroom has achieved. The quality of the journalism keeps getting stronger, and we expect this trend to continue as we begin the conversion sprint. Our best journalism regularly also brings some of the highest conversion numbers. And we know the only way to build a successful digital business is to provide coverage that our customers cannot do without.

As always, thanks for your world-class work and your continuing commitment to The Times.

Norm and Scott

This story has been updated.