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Los Angeles Times axes real estate section

Expect continuing cuts in newspaper industry, says analyst

By Glenn Roberts Jr., Monday, August 4, 2008.

Inman News

The Los Angeles Times has ceased publication of its weekly real estate section -- born more than a century ago -- amid major staff cuts.

In mid-July, newspaper managers began to carry out the "largest staff and production cuts in the newspaper's history," according to an article in the Times, citing "a continuing slide in advertising revenue." The newspaper has a circulation of more than 1 million and ranks among the largest newspapers in the nation.

Staff and content cuts are certainly nothing new for newspapers, and a media analyst told Inman News that similar downsizing will likely continue to plague the industry as ad dollars continue to shift online.

The cutbacks initiated last month at the Los Angeles Times had initially targeted about 150 newsroom employees, or 17 percent of the company's newspaper and Web site editorial staff, according to the Times article, with plans to cut 100 positions in other departments.

Times Publisher David D. Hiller resigned the day after the cutbacks began. Times Editor Russ Stanton announced on July 30 that 135 newsroom employees were laid off, and content cuts have led to 14 percent fewer pages.

Such major cuts at that paper and others have triggered questions about how the industry can properly inform readers about community news in the face of staff cuts, the article notes.

Stanton had earlier stated in a letter to readers that "The future of the Los Angeles Times, in print and online, rests in our ability to meet the needs of our readers and deliver news and information that is unique, far-reaching and indispensable. In-depth journalism remains our hallmark and we are committed to that mission in the face of economic challenges to our industry and our nation as a whole."

He announced that the newspaper's "Home" section would move from Sundays to Saturdays and would combine with "Real Estate," amid other changes -- "Book Review" was merged with an "Arts & Books" section to become "Arts and Books," for example, and the Times had earlier announced the termination of its weekly magazine, among other reductions in content.

Lauren Beale, real estate editor for the Los Angeles Times, wrote in a July 27 blog post at the newspaper's L.A. Land blog, "because of reductions in staff and space, the Sunday Real Estate section has printed its final edition."

She noted that the newspaper would continue to publish real estate coverage throughout the week and a few regular features of the section would continue in the Saturday "Home" and Sunday "Business" sections.

Beale began working for the newspaper's Real Estate section almost 29 years ago. "There's a journalism term for finishing an edition's work: You put the section to bed. When I started as a part-timer in this department ... under then-editor Dick Turpin, I never dreamed that one day I'd be putting the section to bed for good," she wrote. The newspaper's Real Estate section had launched in 1901.

She told Inman News that some other major newspapers have abandoned editorial-produced real estate sections in favor of advertising sections that she referred to as "advertorial," or ad-based real estate content.

Readers' online comments about the end of the weekly Real Estate section ranged to the extremes, from anger at its cancellation and the media company's owner Sam Zell to ugly condemnation of the section.

A supporter of the section wrote, "it was informative (plenty of question-and-answer columns for renters, condo and home owners), presented the facts, and provided some entertainment." That reader planned to cancel the newspaper subscription over the loss of its Real Estate section, according to the post.

"I'm more of a news, business, sports guy, so I didn't read the Real Estate section," wrote another Times reader. "But I am disturbed by the prospect of some of our big city papers being dramatically downsized or going away. The Internet (is great at) distributing other people's content, but not so much at originating it ... papers like the L.A. Times, imperfect though they may be, still frequently play an important role in keeping our other institutions honest."

Meanwhile, another wrote, "I'm probably not going to miss the Real Estate section. The only thing I ever read in the Real Estate section was the story of how some self-absorbed celebrity is selling his mansion for $10 million, which was always curiously $8 million more than similar-sized homes in the same area."

Helene Lesel, a real estate writer whose syndicated "Rental Savvy" columns have run in the Los Angeles Times for the past seven years, said her column is one of the casualties in the demise of the weekly section.

"They're not going to accept anymore syndicated material -- there's not anywhere to put it," said Lesel, whose columns are distributed by Inman News. "I had read that section since I was a little kid." The Times seems to be focusing more on the Web these days, she said. "It's a whole new world out there."

Stanton's letter last month did state that the newspaper's Web site "just recorded its biggest month ever in June with 115 million page views, a 50 percent increase over last year," and Stanton also noted that readers "embraced" some of the Web site's new blogs.

Real estate ad budgets are shifting toward online media -- and that shift is likely permanent, said Colby Atwood, president for Borrell Associates, a media research and consulting firm.

"Real estate advertisers during this downturn are going to be trying the Web, some of them for the first time, and once they do they won't go back," Atwood said.

There has been a drop-off in real estate advertising spending in print publications, owing to the housing downturn and this shift to online media, which can be "more efficient, more trackable" and offer a better return on investment.

"It is not surprising that newspapers are starting to scale back their real estate sections. The decision by the L.A. Times is an example of things that we're going to see more of as (newspapers) manage the contraction of their business -- which is what metro daily newspapers are going to be about for the foreseeable future," Atwood said.

And while some of the ad problems newspapers are facing now with the severe downturn in the housing market are cyclical, Atwood said not to expect ad money to flow readily back into print when the market recovers and rebounds.

"Truly fundamental shifts are taking place in the advertising industry and a lot of advertising media are not coming back. (Advertisers) are going to be hard-pressed to justify spending money on things they now know are inefficient," he said.

A Borrell report released last week states that the newspaper industry suffered a record decline in revenue from classified print ads in 2007, "driven largely by a 23 percent fall in real estate classifieds."

The report also states, "Newspapers are beginning to understand that their most valuable franchise is not local news, but local sales information," and about half of the people who buy a newspaper do so for the advertising content.

Local news may not be a big selling point for local advertisers: "The epiphany that newspaper managers are beginning to experience is that local news and community information (as opposed to national news) may not attract a large or particularly attractive audience for small advertisers," according to the report, noting that the Internet is quickly growing in popularity among small advertisers, with local online advertising increasing at a rate of 61 percent this year.

Residential real estate agents and brokers are expected to spend about 25 percent of their ad budgets with newspapers this year, with 12.8 percent going to online sources and 24.2 percent toward television ads.

Meanwhile, residential real estate developers are projected to spend about 47.9 percent of their total ad budgets with newspapers and about 30.2 percent online; and mortgage providers are expected to spend about 8.9 percent of their ad budgets in newspapers and 22.1 percent online this year.

--Inman News reporter Matt Carter contributed to this report.

***

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Copyright 2008 Inman News

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

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Submitted by on August 4, 2008 - 1:36pm.

Mike Parker
mparker@theblackwatercg.com

Not much of a surprise, here. The surprise is that although the Times now knows that real estate in nespapers is dead, so many brokers don't. Just watch this weekend's Coldwell Banker Supplement, the usual Real Estate ad supplement--why, when you look at that, you'd think newspapers were still the 'go to' spot for real estate advertising.

The paradigm has changed: real estate is shopped online, now. Maybe some day soon, the brokers who justify spending six figures in newspaper ads each month will wake up and smell the Internet!

 
Submitted by on August 4, 2008 - 1:37pm.

It really burns me up that in the last 5 years my company has spent more and more money on Newspaper ads that are reaching fewer and fewer people, mostly to appease the sellers. We spent 25% less on our Newspaper advertising last month, and non one complained or even noticed, I can't wait for the day when we no longer rely on print ads at all.

 
Submitted by Victor Schultz on August 4, 2008 - 1:44pm.

No surprise! The internet's information is endless and up to date and ready to read or view at any time. Newspaper ads have become very expensive as well for a few short lines of text with little or no results.

It is amazing to me that the newspapers still have any readership, but I guess there are still lots of families with hamsters and parakeets out there.

Unfortunately, We have not figured out how to line the bottom of cages with shredded CDs yet.

Victor Schultz
President
VTGlobe
www.vtglobe.com

 
Submitted by Jeff Judge on August 4, 2008 - 1:46pm.

@Sally Lapides: Just stop spending the money then. Why bother?

 
Submitted by on August 4, 2008 - 1:48pm.

I haven't advertised in the newspaper in a long time. Why spend $2300 for a full page ad that maybe 5000 people will read when for $50, I can have a featured ad on Trulia that will run indefinitely and be seen by thousands each day? Shhhh, don't tell my competition!

 
Submitted by on August 4, 2008 - 1:58pm.

Old ways of doing real estate are....

http://GoneWithTheWeb.com

 
Submitted by on August 4, 2008 - 2:09pm.

I'm thrilled...now if Naples Daily News follows, you will surely see a happy dance out of me!

 
Submitted by on August 4, 2008 - 4:11pm.

Society continues to evolve. They say the only thing that's constant is change. It actually surprises me when a seller asks for print
- as www.1740OceanParkBlvd.jodisummers.com
did last week. To please them, I'm buying advertising I don't believe in to please my clients.

Anyone have a good arguement to move sellers away from print?

Thanks,

Jodi Summers
Sotheby’s International Realty
jodi@jodisummers.com
www.SoCalInvestmentRealEstate.com
www.SantaMonicaLandmarks.com

**
The universe is full of magical things patiently waiting for our wits to grow sharper.
- Eden Phillpotts

 
Submitted by on August 4, 2008 - 4:33pm.

@Marcie - This is just a natural progression that has been mandated by "real estate buyers" as they move to the web. If you think this is bad, just wait 10 more years as "news readers" move from reading newspapers to blogs.

--
Justin Britt
Head-Web-Head
Hawaii Life Real Estate Services, LLC
Kauai real estate | Real Estate Marketing

 
Submitted by Suzi Enders on August 4, 2008 - 4:58pm.

It's a new day folks and time for change is here, I love it! Newspapers are loosing advertising dollars to online ads and it is good for business, our business.
See you all online!

Suzi Enders, Realtor
Century 21
5350 Skyway
Paradise, CA. 95954
1-530-873-6146
www.ParadiseRealEstate.us

 
Submitted by on August 4, 2008 - 6:29pm.

It's certainly ironical that the man who made his money from real estate (Sam Zell) has reduced coverage of real estate in the newspaper he now owns.

 
Submitted by Jeff Manson on August 4, 2008 - 9:33pm.

Newspaper advertising has been dead for awhile now. Maybe brokers will realize that now that that times are a little tougher and they actual have to look seriously at their expenses. It has been a big waste of money and energy for a long time.

Jeff Manson
American Dream Realty
Personal: Oahu real estate
Company: Hawaii real estate

 
Submitted by on August 5, 2008 - 3:31am.

Newspapers are the new MLS book. They are going to hang around for years for no good reason. We just need to cut the cord!

Joe Ballarino
Amerivest Realty, Real Estate Franchise
Naples, Florida

 
Submitted by Karen Rice on August 5, 2008 - 6:25am.

I understand that this is progress, but I also understand the sadness over it. We are creatures of habit and tradition and it stinks to see something that's always "been there" go away - much like Millie's Market on Church Street, squeezed out by mega supermarkets outside of town; much like the small bookstore in "You've Got Mail" being shut down by places like Borders...

Funny, I went to Steamtown National Historic site a couple of years ago and watched a movie about the glory days of the steam locomotive/passenger trains. And I thought - wow, that was nice, too bad it's gone now.

That's just the way life is - progress is exciting for most, but for some of us, it leaves us wistfully looking back for what was, while we reluctantly grasp onto what is (or be left behind.)

Northeast PA / Pike & Wayne County Real Estate Agent
Lake Wallenpaupack Real Estate Website

 
Submitted by Marc Blasi on August 5, 2008 - 10:27am.

Unfortunately some clients still insist on print, but the #'s are going down.
I am surprised that it's taking so long considering that the internet trumps print in every way.

Marc J Blasi
www.PalmBeachRealEstateAndLoans.com

Realtor - Leibowitz Realty Group
www.LeibowitzRealty.com

Mortgage Broker - Knightlines Mortgage Services
www.KnightlinesMTG.com

 
Submitted by Patrick Duffy on August 5, 2008 - 10:46am.

I was lucky enough to work with Lauren Beale during my short-lived freelance writing career for the L.A. Times (January 2008 - present), which included three features and three book reviews. Her edits were fair, she paid quickly and consistently produced a great section under tough deadlines.

What concerns me, however, is this idea that blogs will somehow replace feature writing -- um, no they really won't (and I say that as a blogger as well). Since most blogs tend to cite the work of others (i.e., did you see this?), they'll also have to adapt if papers continue to cut back on reporting staff, including providing more professional content (i.e., getting rid of basic spelling and grammar errors).

I also don't understand why the Times won't simply carry syndicated content on their website -- it just doesn't make sense to get rid of columns they've carried by sources such as Inman simply because they've eliminated the print version. After all, on the web, there's ALWAYS room!

 
Submitted by Ginny McGonigle on August 5, 2008 - 11:20am.

This was inevitable. I can't remember the last time I looked at the real estate section of the Los Angeles Times. I get everything I need and read everything with regard to real estate online.

But there is still a segment of the population that does not use the internet. John McCain comes to mind...he said he has not figured out the internet yet so he would be a candidate for the print ad.

Ginny McGonigle
Keller Williams Realty/Santa Monica
http://westsidehomefinders.com

 
Submitted by on August 5, 2008 - 9:11pm.

I'm not surprised! Los Angeles Times had to follow the trend of other big businesses axing employees. As sad as it is, this is the internet age and everything is online. Convenience is the key. Although for the older individual that does not understand technology, this will be difficult.
We have a family friend who has been in the newspaper industry for the last 30 years and was let go from the Arizona Tribune this spring. His words was that newspaper syndication will be obsolete real soon, technology surpasses the paper.

Cheron Lange
http://letourfamilyhelpyours.com

 
Submitted by Ralph M on August 6, 2008 - 8:52am.

Rupert Murdoch, "Print is dead"

If you want to purchase a newspaper, give him a call.

www.aarsteam.com

 
Submitted by Kyle Louvar on August 7, 2008 - 12:09pm.

Online advertising is the mainstream. Even better is mobile technology, specifically text messaging. Only 1 billion internet users compared to 2+ billion mobile phone users! 75% of mobile phone users text message every day. Text message marketing is the future of real estate marketing!! We have agents across the U.S. using our service, Reply7, and generating instant "real-time" leads within seconds. One of the most inexpensive and successful marketing/lead generation solutions available!

Kyle Louvar
COO
Reply7, Inc.
www.reply7.com

 
Submitted by Matt Carter on August 7, 2008 - 2:12pm.

Patrick, that's a great point about how much of the content on the Internet originates with newspapers.

I think people may lose sight of this because you will often see a blog citing some other blog as "having the scoop" on a story. But when you go to that blog, you'll see the original source is a newspaper or other news organization.

Blogs often provide better insight or bring new details about a story to light, but most bloggers probably aren't out there digging stuff up and breaking news the way paid news gatherers do.

Shannon, you can do a "happy dance" if your local newspaper goes under, but ask yourself this: do you know any bloggers that will stay at your local City Council meeting until 1 a.m. to report on the debate that takes place before that controversial vote? Who will ask all the people running for local office about their views, and check on who's paying for their campaign materials? Know any bloggers who will keep tabs on how your community's only hospital is run, or whether the school district is going to be broke and have to close schools next year?

Those are among the many things a good local paper strives to do. The irony is that while many newspapers are growing their online revenue, most haven't been able to do so at the same pace they are losing print advertising and subscriptions. The more they cut costs, the less original reporting they do, and the less relevant they become. It's a vicious circle that can lead to a paper's demise -- or an entire chain's (anybody remember Knight Ridder?).

If you want to see how influential newspapers still are at the local level, turn on the 6 o'clock TV news report and see how many of the serious stories they're covering (those that don't involve police cars, fire trucks or ambulances) were in the morning paper. If your local paper is no good, the local TV news is likely to be even worse.

At the national level, we all suffer if there's less competition among news organizations to dig up stories. Bloggers can complain about the government's actions, but only if they know about them in the first place. It often takes professional journalists to bring them to light.

I understand why many people in the real estate industry are hostile toward the news media. The dire stories about housing in the national news often don't pertain to your local market, and your local newspaper may not have an experienced business reporter. The chances that they will have a reporter who covers nothing but real estate are getting to be pretty much nill.

An interesting concept in the Borrell report mentioned above is that, like MLS listings generated by real estate brokerages, the ads that realtors purchase in newspapers are also "content" that attract readers. Perhaps newspapers have underestimated the value of that content in calculating their advertising rates. Before the Internet came along, newspapers (especially those that enjoyed a monopoly in their market) could make advertisers pay through the nose, and there seems to be some lingering resentment over that practice.

Some newspapers enjoyed exorbitant profit margins during that era, but the reality is that putting news on newsprint does entail big overhead and operational costs. I like to hold a newspaper in my hand and smell the newsprint as I flip through it for stories that catch my eye. But some newspapers may have to sell their printing presses to survive, and exist only online.

Unfortunately, in the online world, anybody can take the content you have put so much time and effort into producing and reproduce it effortlessly on their own site without compensating you. Papers like the San Francisco Chronicle have built very successful Web sites but are still hemorrhaging money.

It seems that newspapers need a new business model to make the transition to online. It will be up to market forces to decide whether they make it, but I can't understand why anybody would root against them.

 
Submitted by on August 8, 2008 - 2:43pm.

So much of what we do & spend our money on is to satisfy the Seller's need & our own egos. Where the rubber meets the road it's "how do you reach the Buyers & how do you fulfill their needs". If you satisfy a Buyer you automatically find a Seller with a smile on his face as well because you have just sold his property.

Rich Johnson
360-319-3267
http://www.johnsonteamrealestate.com
http://www.johnsonteamrealestate.com/blog/

 
Submitted by Joseph Bridges on August 11, 2008 - 11:10am.

The times had some interesting articles before they cut but they also had articles that were unbalanced and only had eye catching headlines with little or no merit. I know that is how the newspaper business often works but it did them in. They failed to provide enough value to their advertisers (realtors, brokers,lenders) and to their readership or it would have stayed around. Just because LA real estate is having some short term problems is no reason to get rid of a section. Are they going to bring it back when the market turns? Maybe they should also change with the times.

Visit the blog at: http://www.InternetRealEstateSuccess.com
Real Estate Resources at: http://www.OnlineRealEstateSuccess.com

 
Submitted by Steven Beam on August 18, 2008 - 3:01pm.

When the ad prices more than doubled in Denver 7+ years ago I stopped all newspaper ads. For the prices charged it was money down the drain.

I ride my bike early in the mornings and in my neighborhood of several thousand homes I see very few papers in the driveway. One house on my street takes the paper and they only get it on the weekends. No big loss in my opinion.

Steven Beam
Parker, Colorado Real Estate
http://www.parkercoloradorealestatehomesforsale.com