Friday, March 9, 2007

Media take careful aim and shoot their own feet

Just as media companies' zeal for ever-increasing profits is being criticized, a recent study from the University of Missouri shows that some newspaper companies seem to be hurting themselves in a short-sighted business approach.
Research into 900 newspapers' budgeting over a decade shows that many invest more in their circulation and advertising departments than their newsrooms, according to "Uphill or Downhill: Locating Your Firm in a Profit Function," scheduled to be published in April's Journal of Marketing. (see http://www.freepress.net/news/21211 ).
Apart from sacrificing journalism, that hurts news-media companies' own bottom lines (also see http://news.yahoo.com/s/nm/20070215/media_nm/newspapers_newsrooms_dc_1 ).
"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," said Missouri's Esther Thorson, the study's co-author.
Her colleague, Murali Mantrala added, "Until recently, people have been doing it because the results looked good to investors on Wall Street, but it's ... ignoring the long-term aspects."
Their findings come on the heels of criticism by the likes of legendary journalist Walter Cronkite, who bemoaned media executives' stressing profits over journalism.
"In this information age and the very complicated world in which we live today, the need for high-quality reporting is greater than ever," Cronkite said at at Columbia University. "It's not just the journalist's job at risk here. It's American democracy. It is freedom." (see http://biz.yahoo.com/ap/070208/media_ownership.html ).
Author Philip Meyer, the University of North Carolina professor who wrote "The Vanishing Newspaper," was cheered by the Missouri study.
“I am delighted to see them post proof that quality precedes profit,” he said.

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