Thursday, February 15, 2007
Spending on News Quality is Good for Newspapers
Investing money to improve the quality of news coverage actually makes newspapers more profitable, a study by researchers at the University of Missouri-Columbia has found.
Murali Montrala and Esther Thorson led a team of researchers to examine profitability at newspapers. They analyzed financial data for small to medium-sized newspapers and found that the quality of news coverage strongly influenced the bottom line.
It should be no surprise that producing a better product leads to better profits. But it must be for the corporations that own newspapers — and the Wall Street firms that are flogging newspaper management to lay off reporters and editors to slash newsroom expenses in what now looks like a self-defeating effort to uphold large profit margins. "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," Thorson was quoted in a news release as saying. She is a professor of advertising and associate dean for graduate studies in the School of Journalism at Mizzou.
The study by Thorson and her colleagues shows that readers are deserting newspapers not just because of competition from the Web but also because newspapers are offering their readers less content and lower quality. Interviewed this morning on American Public Media's Marketplace program, Thorson said, "You know, I'm worried about the newspapers in all the little cities across the United States. They are our one depth instrument for allowing citizens to understand what's going on in their own communities. We're losing those just as fast as we're losing content and quality in any of our news sources."