DOCUMENT RESUME ED 349 622 CS 507 969 TITLE Proceedings of the Annual Meeting of the Association for Education in Journalism and Mass Communication (75th, Montreal, Quebec, Canada, August 5-8, 1992). Part XV: The Newspaper Business. INSTITUTION Seneca Nation Educational Foundation, Salamanca, N.Y. PUB DATE Aug 92 NOTE 324p.; For other sections of these proceedings, see CS 507 955-970. For 1991 Proceedings, see ED 340 045. PUB TYPE Collected Works Conference Proceedings (021) EDRS PRICE MF01/PC13 Plus Postage. DESCRIPTORS *Business Administration; *Economic Factors; *Employer Employee Relationship; Foreign Countries; Journalism History; Marketing; *Mass Media Role; Media Research; *Newspapers; Ownership; *Publishing Industry; Trend Analysis IDENTIFIERS *Business Media Relationship; Indiana; Newspaper Circulation ABSTRACT The Newspaper Business section of the proceedings contains the following 13 papers: "Daily Newspaper Market Structure, Concentration and Competition" (Stephen Lacy and Lucinda Davenport); "Who's Making the News? Changing Demographics of Newspaper Newsrooms" (Ted Pease); "Race, Gender and White Male Backlash in Newspaper Newsrooms" (Ted Pease); "Race and the Politics of Promotion in Newspaper Newsrooms" (Ted Pease); "Future of Daily Newspapers: A Q-Study of Indiana Newspeople and Subscribers" (Mark Popovich and Deborah Reed); "The Relationship between Daily and Weekly Newspaper Penetration in Non-Metropolitan Areas" (Stephen Lacy and Shikha Dalmia); "Employee Ownership at Milwaukee and Cincinnati: A Study in Success and Failure" (Randy Reddick); "The Viability of the Comprehensive Daily Newspaper" (William B. Blankenburg); "Organizational Culture: A Shield Against Organizational Stress" (Barbara K. Petersen); "The Effects of Work Environment on Job Burnout in Newspaper Reporters and Copy Editors" (Betsy B. Cook and others); "Do Managers Forecast the Newspaper Industry's Economy?" (Virginia Roark and Gerald Stone); "The News Ombudsman, the News Staff and Media Accountability: The Case of the Louisville Courier-Journal" (Neil Nemeth); and "Effects of Joint Operating Agreements on Newspaper Competition and Editorial Performance" (David C. Coulson). (HB) *********************************************************************** AeprouucLions suppilea ey Eilhb are tne best tnat can be made from the original document. *********************************************************************** PROCEEDINGS OF THE ANNUAL MEETING OF THE ASSOCIATION FOR EDUCATION IN JOURNALISM AND MASS COMMUNICATION (75th, Montreal, Quebec, Canada, August 5-8, 1992). Part XV: The Newspaper Business. THIS U.S. DEPARTMENT OF EDUCATION "PERMISSION TO REPRODUCE Office of Educationai Research and improvement MAT RIAL HAS BEENGRANTED BY EDUCATIONAL RESOURCES INFORMATION CENTER (ERIC/ 11 This document has been reproduced as 4',A . received from the person or organization originating it 0 Minor changes have been made to improve reproduction quality Points of view or opinions slated in this docu- TO THE EDUCATIONALRESOURCES ment do not necessarily represent official INFORMATION CENTER(ERIC)." OERI Position or policy 2 BEST COPY AVAILABLE Daily Newspaper Market Structure, Concentration and Competition by Stephen Lacy and Lucinda Davenport School of Journalism Michigan State University East Lansing, MI 48824 (517) 355-2489 Paper presented to the Newspaper Division of the Association for Education in Journalism and Mass Communication, Montreal, August 1992. Note: The authors thank Michael Lee, Kay Robinson and Fred Greene for their help with collecting and inputting data. 3 J. Edward Gerald asked in 1958, "What is the natural trade territory of a newspaper?"' For decades, mass communication researchers investigated newspaper competition assuming that the city was the appropriate territory.2 However, in 1975, Rosse presented the "umbrella model" of competition, which states that different types of newspapers compete across city boundaries.3 Several studies about umbrella competition within metropolitan areas followed, but few efforts were made to look into competition outside of these metro areas.4This study will examine the market structure of the daily newspaper industry using the umbrella model and also will examine the extent of daily and Sunday concentration and competition within counties in 1983 and 1989. Literature Review In 1968, Nixon noted that daily newspapers competing within the same city had all but disappeared in the United States surviving only in the nation's largest cities.s He reported that in 1880, 61.4% of the cities with dailies had two or more.This figure declined to 42.6% in 1920, 8.4% in 1945 and 3% in 1968. Just as Nixon talked about competition as a city phenomenon, Busterna also studied concentration in cities.6 Understandably, results were similar. Busterna reported that the trend shown in Nixon's research and other studies had continued into the 19808. By 1986, only 1.9% of cities with dailies had two or more. He predicted further declines. This growing concentration within cities is a result of several forces at work in city newspaper markets.? These forces come together to create what Picard and Lacy call -interactive 4 monopoly power."8This monopoly power within cities results primarily from the impact of economies of scale, the joint product nature of newspapers, and the tendency of advertisers to seek the largest readership. In recognition of the fact that many dailies now circulate outside their city and even county, Picard moved away from the traditional way of researching concentration in two ways: first he looked at concentration measures rather than just counting dailies; second, he looked at the nation and metropolitan areas as ways of defining newspapers' geographic markets.9He said the relevant market is the specific national, regional or local markets in which various newspapers compete. After considering the national newspaper market and 30 local markers separately, Picard concluded that the amount of newspaper concentration increased as the geographic size of the market decreased. These 30 markets were from the 100 largest markets in the United States. Picard based his examination of metropolitan competition on the umbrella model, which classifies newspapers into four layers based on geography and news content: metropolitan dailies, sate'.lite -city dailies, suburban dailies and a variety of weekly newspapers, shoppers and total market coveragepublications. Metro dailies cover a wide geographic area and provide extensive national and international news, as well as local news about the metro area. Satellite dailies are those published away from the immediate central city of a metropolitan area.They also provide national and international coverage, but they are morelocal in nature than metro dailies. Suburban dailies are those dailies found within the metropolitan area but outside the central city. They are primarily local in nature. The weekly layer layer is almost entirely local. Results of Picard's study indicate that newspaper markets are highly concentrated compared to other industries.He pointed out that a weakness was the inclusion of the broad metropolitanarea as the market. This would indicate that all suburban dailies were competing, when in fact they probably would not. A further limitation of this study is its reliance totally on measures of concentration. While concentration and competition are generally related, the degree of relationship varies from industry to industry. In some industries, a market with two firms will act like a monopoly, while in others two firms will be extremely competitive. Research suggests that newspaper markets are more competitive than their concentration levels would indicate. Litman and Bridges reported in 1986 that intracity daily newspaper competition, which usually means only two dailies, resulted in increased financial commitment to the newsroom.10Since then, several studies of the financial commitment approach have supported it, although not all studies have.''A national study of daily umbrella competition has reported that as the penetration of competing dailies within a county increases, the newshole of a newspaper and the percentage of the newshole given local coverage increases.12 In a smaller-sample study, umbrella competition was also negatively related to reporter work load, which was in turn related to balance in controversial stories.'3 As mentioned above, most studies of umbrella market structure and competition have examined metropolitan areas, with little effort to look at the market structure in outstate areas. One examination of Michigan found that the potential for umbrella competition was extensive.14 In 1986, 71% of the 83 counties in Michigan had at least one metro daily and one other daily each with 5% or more penetration in the county. The Michigan study also examined the potential for competition within layers of the umbrella model. Rosse had said little intralayer competition would occur because newspaper markets would not overlap.18However, both metro and satellite dailies have been extending their geographic markets during the past decade and in doing so have increased the probability that intralayer daily competition will take place.18Indeed, the Michigan study found that 41% of the counties had two or more metro dailies each with 5% or greater penetration and 42% of the counties had two or more satellite dailies each with 5% or greater penetration. It appears there may be a greater potential for intralayer competition at the county