Impact of Investing In Newsroom Resources, The

Newspaper Research Journal, Winter 2004 by Rosenstiel, Tom, Mitchell, Amy

An analysis of Inland Press Association data for 1987 suggests that if a paper invests more in its newsroom, over time, it will increase revenue, circulation and profit substantially - much more than the cost of investing in the product.

To the investment community, the newspaper industry is a mature industry, one that may survive but is in long-term decline. Many newspaper companies for the last decade have operated on basically that assumption, trimming costs, jettisoning costly circulation, looking for efficiencies to maintain margins, disinvesting.

Is the profession on the right track? Or is it abdicating its social responsibility in the name of economics unnecessarily?

Was there ever a case to be made that good journalism was good business? And if there was, can the case still be made?

The questions have broad impact both for journalism and American society. They also demand a critical role for academic researchers concerned with journalism.

Is the newspaper industry dying?

If not, what steps do newspaper publishers and journalists need to take to thrive?

As the newspaper industry becomes more complex and difficult, publishers and editors need better and more informed tools for decision making. The academy can offer those tools. The gulf between practitioners and researchers needs to be bridged. Researchers need to be able to tell the profession whether there is an empirical case for what many journalists for years have taken as an article of faith, the notion that good journalism was good business. Publishers need to be able to persuade financial markets whether there are signs that investing in newsroom quality will still attract more readers and justify itself economically.

And what role can researchers play in this? In particular, can they make the argument for newspapers' future empirically, and in a way that might persuade publishers and the investment community?

Answering these important questions involves several dimensions, but one of the critical ones is trying to figure out with research what newspapers have to do to ensure their future. More specifically, can we demonstrate empirically what many journalists have postulated for decades - that investing more in the newsroom will benefit the bottom line? Can we say with some real confidence where those investments should be?

As we will outline in a moment, the preponderance of academic literature suggests researchers have already established the case historically that good journalism has been good business.1

In this paper, we will report on ongoing new research that is adding contemporary data and taking the established work a step further. The findings could have significant application in the industry. Researchers now think it may even be possible to develop, if provided with multi-year data from a newspaper, economic models for how much investing in that particular newsroom is likely to help grow revenue and circulation.

To accomplish this, first it is necessary to confront a longstanding philosophical question that many journalists, and even many publishers, have been uneasy with. Indeed, the unease over this issue is one reason, though not the only one, why so little data is available about American newspapers, and why researchers often encounter resistance in doing research in this area.

Should newspaper organizations try to measure the quality, or the value of their newsrooms?

To many journalists, this seems risky. Quality is partially subjective, and trying to create standards for it may actually tend to dampen it by homogenizing it. The best journalists are often those who bring the undefinable, the intangible, to their work. What, if in a given market, you can't quantify that investing in your newsroom will help the bottom line? You may, in the end, have damaged your case.

All legitimate concerns. For these, and many other reasons, many editors in the United States have operated by what we might call the Bull Editor approach-a strong newsroom guardian as editor in chief who protected the newsroom and fought for its independence by prestige and force of personality.

There is, however, another reality today that journalists and publishers must come to recognize. In modern business, we tend to value what we count. And what is not counted tends to be devalued.

We are well past the age in which editors can argue there is an unbreakable wall between the news and business sides of a news organization. Frankly, history shows the wall was always a myth.2 Today, the myth is gone too. Like it or not, the age of the Bull Editor has passed. We have reached a point where news executives need to make a better case for what they do than "get out of my newsroom."

That, as we will show in a moment, has already proved a losing argument. Not long ago at the Poynter Institute, one of the country's most respected market analysts said that frankly, he does not take into account a newspaper's quality in making recommendations because he has no way of keeping track of it.3

There are also signs, to be blunt, that some newspaper companies aren't sure they believe good journalism is good business anymore.