Four Revenue Generators That Newspaper Publishers Overlook
Researchers at RJI partner with news companies and uncover ways to increase profitability
Columbia, Mo. (May 28) - Researchers at a Donald W. Reynolds Journalism Institute (RJI) conference have developed four tools newspaper publishers can use to increase revenues and profits.
“With newspapers in crisis Americans are losing their highest quality source of information” said Esther Thorson, Ph.D., director of research at the Reynolds Journalism Institute at the University of Missouri.
“Independent researchers have developed several approaches that newspaper managers may not know exist which can help newspapers increase revenues and grow profits.”
Thorson convened a forum on May 18 - 19 that brought together both newspaper executives and experts in news research. The purpose was to explore research designs aimed at solving the industry's urgent problems using advanced analytic tools with practical applications. The conference, titled “How Newspapers Could Have Saved Themselves and How Some Still Can,” identified financial strategies to significantly increase revenues and profits and to help newspaper finance managers better understand how budgeting decisions across news, advertising, and circulation departments affect revenues and profits.
Among the approaches presented:
- A resource optimization model publishers can use to measure whether they are investing too much, too little, or the right amount among news, ad sales, and distribution departments for maximum revenue growth. The model was tested on hundreds of newspapers by Thorson, Shrihari Sridhar, assistant professor at Michigan State University, and Murali Mantrala, Sam. M. Walton distinguished professor of Marketing at the University of Missouri.
- Guidelines for optimal distribution of layoffs and buyouts among departments. This approach, based on dozens of newspapers’ experiences, shows which departments should shoulder the biggest and smallest shares of employee layoffs for optimal revenue and profit maintenance. Developed by Thorson, Mantrala, Sridhar, and Elina Tang of the University of Missouri, the study found that cost-cutting evenly across the board at many newspapers may actually destroy profitability.
- A new page-view pricing strategy for online and print ads that offers a more accurate picture of consumer online behavior for advertisers, offered by Jim Smith, vice president of research for Morris Communications.
- Online pricing strategies that can help publishers decide how to repurpose, hold back, or charge for online content that also appears in print. One approach, similar to how movie studios have multiple revenue streams from theater showings, pay-per-view, DVD sales, and foreign sales, was offered by Hugh Martin, associate professor at the Grady College of Journalism and Mass Communication at the University of Georgia. A second approach was presented by Hsiang Iris Chyi, assistant professor at the University of Texas at Austin.
“Newspapers hold rich sources of data which can be mined for additional revenue generation,” Thorson said. “Academic researchers have the expertise to mine this data for the benefit of newspapers and their customers.”
Participants at the May 18 – 19 conference, titled “How Newspapers Could Have Saved Themselves and How Some Still Can,” included:
Hsiang Iris Chyi, Assistant Professor, University of Texas at Austin
Frank Denton, Editor, The Florida Times-Union/jacksonville.com; VP for Journalism, Morris Communications
Gary Kromer, Former Director of Research, Fort Worth Star-Telegram; Past President, Newspaper Association of America Research Federation
Murali Mantrala, Sam W. Walton Distinguished Professor of Marketing, University of Missouri
Hugh Martin, Associate Professor, Grady College of Journalism & Mass Communication, University of Georgia
Phillip Meyer, Professor Emeritus, University of North Carolina
Jim Smith, Vice President of Research, Morris Communications
Shrihari (Hari) Sridhar, Assistant Professor, Michigan State University
Elina Tang, doctoral student, University of Missouri
Esther Thorson, Associate Dean for Graduate Studies and Research, Missouri School of Journalism
George Sylvie, Associate Professor, Journalism Department, University of Texas
For more information on these findings, including a pdf copy of the report, contact Esther Thorson, thorsone@missouri.edu.
About RJI
The Donald W. Reynolds Journalism Institute (RJI) is located at the Missouri School of Journalism on the University of Missouri campus. RJI programs are aimed at improving journalism in the service of democracy.
Some RJI initiatives focus on immediate challenges and opportunities, testing new technologies or business strategies for the gathering, formatting or delivery of news and advertising. Others are more long-range and conceptual, aimed at preserving traditional journalism values like accuracy and fairness in a chaotic technology and business environment. In its first four years RJI has launched more than 60 journalism projects, most of them in collaboration with the nation's leading private media companies and professional journalism and advertising organizations.
The Reynolds Journalism Institute was founded with an initial grant of $31 million from The Donald W. Reynolds Foundation, a national philanthropic organization founded in 1954 by the late media entrepreneur for whom it is named. Headquartered in Las Vegas, Nevada, The Reynolds Foundation is one of the largest private foundations in the United States.
Learn about other RJI research initiatives.
For more information contact:
Kelly Peery, Donald W. Reynolds Journalism Institute, peeryk@rjionline.org; (573) 884-9121