Breaking news for management types

[Mighty_Wingman]

Apparently, the secret to success in the newspaper business is...what's that?

SPEND MORE MONEY ON THE NEWSROOM.

This pretty much has to go under the heading of "a pleasant surprise."

http://journalism.missouri.edu/news/2007/02-15-newsroom-profitability.html

In recent years, the newspaper industry has experienced a variety of changes. None have been more noticeable than declining profit margins. Researchers at the University of Missouri-Columbia now have valuable information that could help publishers reverse the downward trend.

Murali Mantrala, who is the Sam Walton professor of marketing in the College of Business, and Esther Thorson, director of research for the Donald W. Reynolds Journalism Institute and associate dean for graduate studies in the Missouri School of Journalism, recently examined the profitability of newspapers. They collaborated with marketing doctoral students Hari Sridhar and Prasad Naik, who is now a professor at the University of California-Davis. The team of researchers focused on three areas of operation - news quality; distribution and circulation; and advertising - by analyzing financial data of small- to medium-sized newspapers with circulations of 85,000 or less. Research revealed that news quality most directly affects the bottom line.

"The most important finding is that newspapers are under-spending in the newsroom and over-spending in circulation and advertising," Thorson said. "If you invest more in the newsroom, do you make more money? The answer is yes. If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money."

I don't know whether to be happy that PhDs have backed up this simple and obvious fact, or to be sad that PhDs had to back up this simple and obvious fact.

Here's the study itself, in the unlikely event anyone wants to read it.

http://www.atypon-link.com/AMA/doi/abs/10.1509/jmkg.71.2.26

 

[Mighty_Wingman]

And yes, I know this is pretty much the textbook definition of "preaching to the choir."

 

[Inky_Wretch]

I just e-mailed that link to my ME. If I get canned, I'm blaming you.

 

[Mighty_Wingman]

Blame the University of Missouri.

As per usual.

 

[Frylock]

You probably need to e-mail it to the CEO of the company that owns your paper ...

 

[WazzuGrad00]

I seem to remember a discussion about this earlier in the year.

I think most folks figured it would be discounted because it was conducted by a journalism school.

 

[Mighty_Wingman]

Fair enough. But it wasn't exactly subjective: They used four years' worth of data from 1,400 daily papers.

 

[da man]

I seem to remember a discussion about this earlier in the year.

I think most folks figured it would be discounted because it was conducted by a journalism school.

It looks like mostly marketing types conducted the study, though.

 

[WazzuGrad00]

Here's the threads I thought I remembered:

http://www.sportsjournalists.com/forum/threads/37668/
http://www.sportsjournalists.com/forum/threads/37672/

 

[Mighty_Wingman]

This is why I hardly ever start threads.

Jesus. Not just a d_b, but a double d_b.

My apologies.

 

[Flying Headbutt]

Doesn't hurt to reiterate things though, don't ya think?

 

[Bob_Jelloneck]

Apparently, the secret to success in the newspaper business is...what's that?

SPEND MORE MONEY ON THE NEWSROOM.

This pretty much has to go under the heading of "a pleasant surprise."

http://journalism.missouri.edu/news/2007/02-15-newsroom-profitability.html

In recent years, the newspaper industry has experienced a variety of changes. None have been more noticeable than declining profit margins. Researchers at the University of Missouri-Columbia now have valuable information that could help publishers reverse the downward trend.

Murali Mantrala, who is the Sam Walton professor of marketing in the College of Business, and Esther Thorson, director of research for the Donald W. Reynolds Journalism Institute and associate dean for graduate studies in the Missouri School of Journalism, recently examined the profitability of newspapers. They collaborated with marketing doctoral students Hari Sridhar and Prasad Naik, who is now a professor at the University of California-Davis. The team of researchers focused on three areas of operation - news quality; distribution and circulation; and advertising - by analyzing financial data of small- to medium-sized newspapers with circulations of 85,000 or less. Research revealed that news quality most directly affects the bottom line.

"The most important finding is that newspapers are under-spending in the newsroom and over-spending in circulation and advertising," Thorson said. "If you invest more in the newsroom, do you make more money? The answer is yes. If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money."

I don't know whether to be happy that PhDs have backed up this simple and obvious fact, or to be sad that PhDs had to back up this simple and obvious fact.

Here's the study itself, in the unlikely event anyone wants to read it.

http://www.atypon-link.com/AMA/doi/abs/10.1509/jmkg.71.2.26

Needless to say, I don't want to read it.

 

[Fenian_Bastard]

Winger --
For me, you can't say this enough.

 

[Inky_Wretch]

Winger --
For me, you can't say this enough.

No doubt. This thread should be stickied at the top of the board ... just in case any management types are lurking they might read it.

 

[Mighty_Wingman]

Here's hoping. But somehow I doubt Craig Dubow (Gannett's CEO) spends much time browsing SportsJournalists.com.