By Esther Thorson
Associate Dean, University of Missouri

There are three generalizations about newspaper quality and economics that can be derived from the academic literature. All of the generalizations are based on long-term relationships, not short-term ones. The propositions are these:

  1. Quality news content, as defined by readers and journalists, positively affects circulation/penetration.
  2. Newsroom expenditures positively affect content quality.
  3. Revenues are increased by circulation/penetration.
If we put these together, we get the following model:

Newsroom expenditures --> Content quality --> Circulation/penetration --> Revenues

All things being equal (and they never are), this model says that spending money on newsrooms increases news quality, which then increases circulation and revenues.

Anyone who has had the misfortune to read scholarly studies knows that findings are sometimes ambiguous or even contradictory. The key, however, is to examine whole areas of research looking for what general patterns receive significant support and when necessary for simple explanations for when findings are in conflict.

The project reported here asked three of the top scholars on newspaper economics and quality to do just that. The three are Leo Bogart, Steve Lacy, and Robert Picard. Their detailed reviews and analyses will be available late this spring. But putting together what they have found so far yields strong and straight-forward support for the model articulated above.

Quality content positively affected circulation/penetration

Quality can be thought of either in terms of how resources are allocated or by content. Both of these measures have several different kinds of benchmarks. Resource allocation can be indexed by measures like the size of the newshole, number of editorial staff, and number of wire services. Content can be indexed by accuracy, amount of local news, and markers of depth of coverage like backgrounders, investigative stories, and issues-focused reporting. John Lavine and the Readership Institute at Northwestern University have documented the attraction to readers of specific types of content, such as local news, health, home, food, fashion, travel, politics, disasters and accidents, business and personal finance, science and technology, crime, and sports. This content needs to be embedded in a reader-friendly, navigable environment.

Studies dating back to 1978 have connected higher content quality with increased circulation and penetration. One study in the mid 1980s, using eight different measures of quality from 114 dailies, reported that 22 percent of the variation in circulation was related to quality. A study carried out in the Denver and Detroit metro areas demonstrated a correlation between the content in metro dailies that addressed a particular suburb and the penetration and circulation in that suburb. As certain types of local content increased, circulation increased. The type of content associated with the increases varied from market to market.

The impact of quality on circulation also has been demonstrated with more individual-level studies. For example, a researcher interviewed 30 former long-term readers over two years to see why they dropped and re-subscribed to the daily newspaper. The researcher concluded, "Dissatisfaction with content was the primary reason these loyalists stopped subscribing to their local daily."

Newsroom expenditures positively affect content quality

Although definitions of quality vary, most editors will tell you that having adequate resources in the form of such things as newshole and numbers of reporters and wire services are minimal preconditions to achieving quality. An understaffed newsroom with a limited newshole will not produce as high a quality of journalism as a newsroom with sufficient staff and newshole.

A study in 1998 sought to see how a newspaper group generally recognized for its low quality performed over a decade. The authors selected a chain of newspapers whose own CEO described the company's papers as low quality. The study examined 64 of the company's dailies and 128 similarly sized control papers from the same states from 1980 to 1990. Using regression analysis to control for competition, market size, subscription price, and consumer income, the study found that the lower-quality chain averaged fewer subscribers than its rivals, had lower penetration rates, and revenues were reduced compared to its rivals. Eventually, that chain sold all its papers.

When taken together, the preponderance of large-scale U.S. studies support the connection between newspaper content, circulation and penetration, and overall financial health. These studies are bolstered by other research that demonstrates that -- despite the ingrained, habitual nature of newspaper reading -- if the content of newspapers fails to serve readers, many of those readers will reconfigure their media mix to include other publications, or in some cases drop newspapers entirely.

Let me emphasize a caveat operating here. The relationship between quality and circulation/penetration applies in the long run because people form habits in their media use. Most readers do not change their media mixes quickly unless some event such as a newspaper strike forces them to change. The habitual use of media makes sense for readers because it saves them time. If they had to decide where they would find information each day, it would drastically raise the cost of using media and probably cut back on their media use.

As an extension of this, the perceptions of media product change slowly with repeated use. For example, the statement that circulation is positively related to quality is a long-term relationship. It may take months or years for readers to reshape their reading habits to reflect changes in quality. This works both for improvements and declines in content quality.

In the end, it's probably fair to acknowledge up front that there's no epiphany here. A careful review of 35 years of research confirms what many of you likely believed all along: that investment in quality content improves the bottom line. This leads us to search for a deeper understanding of first, what defines quality content, and second, what should be considered appropriate types and levels of investment in capacity.

Esther Thorson is associate dean for graduate studies and research at the University of Missouri. She is also director of the Center for Advanced Social Research, one of the largest academic research centers that work with news media organizations.