I have always liked research which confirms what I have always believed. So I am delighted that a study by the University of Missouri-Columbia finds: “Newspapers are under spending in the newsroom and over spending in circulation and advertising.”
The full report is to be published in the spring (with convincing methodology, I trust) but one of the academics behind the research, Esther Thorson, has 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.”
Another researcher said: “By looking at the data, investing in news quality does pay off. 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 research covers US newspapers with circulations of under 85,000 where editorial spending has seemed generous compared with the UK. Lucas Grindley who led me to this research feels the conclusion is too simple in the face of the development of online news.
I have argued running online alongside print requires greater investment in editorial rather than redundancies. The bosses of the UK regional papers should read this report when it is published in April.