Tuesday, July 31, 2007
STUDY: Investing in the Newsroom is Good for Business
Newspaper Study: Investing in the Newsroom is Good for Business
Journalism and Marketing Researchers Determine News Quality Directly Impacts Profitability
By Bryan Daniels
MU News Bureau
Columbia, Mo. (Feb. 15, 2007) -- 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."
The assessment was made using a diagnostic tool developed by the researchers. It consists of a mathematical formula that breaks down revenues and expenditures from news, advertising and circulation departments and predicts profitability. The financial data, which covers a 10-year period, was provided by Inland Press Association, a trade organization of more than 900 daily and weekly newspapers. The identities of the newspapers were anonymous.
What they discovered is that during down cycles, newspapers generally focus more on increasing advertising sales and boosting circulation. With the popularity of the Internet and specialized Web sites, Thorson said newspapers have lost some of their advertising appeal with high-dollar advertisers, such as automobile dealerships and major retail establishments. She said classified advertising also isn't as reliable because readers now search online for jobs, houses and various niche items. As societal norms and preferences change, Thorson said that "newspaper revenues are increasingly threatened."
Mantrala and Thorson are confident that industry leaders and publishers will appreciate the value of their research and utilize the information when attempting to rebound from negative cycles. Thorson said the findings, and equally importantly, their solution, can be applied to any newspaper - regardless of circulation.
"By looking at the data, investing in news quality does pay off," Mantrala said. "It improves circulation and advertising revenues, which are the bulk of a newspaper's revenues. Better news quality drives circulation, and circulation drives advertising revenues."
The study, "Uphill or Downhill? Locating Your Firm on a Profit Function," will be published in the April issue of the Journal of Marketing.
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Tuesday, July 17, 2007
Dallas hyperlocal pioneer Pegasus News acquired by Seattle TV-station operator
In a news release sent by email, Fisher said the move was "part of its initiative to develop new online-only content for its key local markets" and said it plans to take Pegasus' news, information and advertising model to additional U.S. markets in the coming year. Financial terms were not disclosed.
Pegasus News will continue to operate from Dallas, Texas, said Orren.
THE NEWS STATEMENT SAID:
"With the Fisher deal, Pegasus News enters the next stage of growth," said Mike Orren, president of Pegasus News. "We have been doggedly committed to delivering local news and advertising of unparalleled relevance to our community, and we're excited to have found a partner who understands the importance and value of local and niche information. We look forward to accelerating our growth and to reaching more cities, towns and neighborhoods over the coming year."
"Our acquisition of Pegasus News exemplifies Fisher's mission to connect people with their local communities," said Colleen Brown, president and CEO of Fisher Communications. "While the Internet has made the world accessible at the click of a mouse, it's still often a challenge to find out what's happening around the corner. Pegasus News has done an outstanding job of creating timely, hyper-local content that is helpful and meaningful to its users and advertisers. We are excited about bringing the Pegasus team to Fisher and see great opportunities in extending this kind of rich local content offering across the communities we serve."
Based in Dallas, Pegasus News launched its Web site at in 2006 with a small editorial team and key content partnerships focused on providing the latest, most relevant news and information about the Dallas / Fort Worth metropolitan scene. It delivers easily accessible local information that simply could not be found anywhere else on the Web, including time-sensitive information on area garage sales, daily specials, local sports, and more.
In 2007, Pegasus News rolled out a feature called The Daily You*, an automatically personalized news service for registered users that, unlike other news services, doesn't require users to go through the hassle of setting up a profile first. The proprietary technology behind The Daily You generates individualized news based on what users actually search for, click on, and read.
Fisher Communications, Inc. is a Seattle-based communications company that owns and manages 19 television stations and eight radio stations in the Pacific Northwest. The Company owns and operates Fisher Pathways, a satellite and fiber transmission provider, and Fisher Plaza, a media, telecommunications, and data center facility located near downtown Seattle. More information about Fisher Communications can be found at www.fsci.com
Pegasus News is a multimedia local news service providing the depth of neighborhood and niche news with the breadth of a daily newspaper. News and data comes from a wealth of sources including reporting by professional staff journalists; aggregation from local sites; content partnerships with local newspapers, broadcasters and bloggers; and user submissions.
FOR MORE INFORMATION CONTACT:
The Fearey Group for
Fisher Communications, Inc.
Phone: (206) 229-0496
Fax: (206) 622-5694