Economic theories suggest that monopolies possess market power that increases allocative inefficiency. Monopolies tend to set prices above marginal costs and reduce quality by cutting expenditures in the news and editorials. As a result, the quality of information and diversity of opinion that should be available to readers are in great danger of being reduced. The purpose of this study is to examine the impact of ownership on daily newspaper human and budget allocation processes in Japan, and then to ascertain whether or not economic factors have a negative impact on the freedom of the Japanese press. Because of the dearth of newspaper studies outside of the West, a study of Japanese newspapers is a worthwhile effort and a valuable first step in developing newspaper research in this part of the world.
A census of all 70 local newspapers affiliated with Nihon Shinbun Kyokai was included in this study. A constructed week was randomly selected and non-advertising space was measured by squared centimeters. Dependent variables in this study were non-advertising space, the percentage of non-advertising space, and the number of reporters. An independent variable is ownership (group-owned newspapers or non-group papers). Newspaper competition in each prefecture, the number of households, and newspaper circulation were used as control variables in this study. Fifty-four independently owned newspapers and 16 group newspapers were compared using multiple regression analysis.
Results from the multiple regression analysis showed that group newspapers had an average of 38.741 fewer reporters than non-group newspapers. Group newspapers also had a non-advertising space that was 36,754.9 square centimeters smaller per week than that of non-group newspapers. When newspapers took the form of group, non-advertising space in the newspaper decreased. However, there was no difference between group and non-group newspapers in the way newspaper management allocated the percentage of non-advertising space in the newspaper.
This study confirmed the impact of ownership on the newspaper resource allocation processes in Japan. Group newspapers reduced the number of reporters and the amount of non-advertising space, and did not commit human and financial resources to the newsroom to the degree non-group newspapers did; instead, they appeared to pursue profit by cutting the number of reporters, and reducing non-advertising space in the newspaper.
Reducing newspaper quality by cutting costs to obtain high profits will have a negative impact on the long-run profits of the firm. In the long-run, the result will be a loss of readers, which will result further in lost circulation revenue, and, consequently, declining advertising revenue.
Other findings associated with dependent variables in this study were:
1. As competition intensifies, newspapers increase the number of reporters and the amount of non-advertising space in the newspaper.
2. Newspapers in larger cities produced a smaller percentage of non-advertising space than newspapers in smaller cities.
3. Newspapers with a larger circulation can afford more reporters, and had more non-advertising space in the newspaper.
Some descriptive statistics from this study were:
1. The average number of reporters working for a newspaper in Japan was 107.73.
2. The amount of non-advertising space in the newspaper in Japan was 212,422.50 square centimeters per week.
3. Local Japanese newspapers had an average of 69.59% of non-advertising space in the newspaper.
4. The average circulation of a local Japanese newspaper was 267,635.64.
5. The market size in which a newspaper circulates varied from 205,871 to 4,000,000.
Title of paper: The Impact of Ownership on Human and Budget Allocation: A Study of Local Japanese Newspapers
Author: Hiromi CHO, an associate professor at Bunkyo Gakuin University, Tokyo Japan.
In addition to the article introduced above, Cho has published several articles on the same research topic in Japan as well as in the United States. One of his remarkable achievements is an article in Journalism & Mass Communication Quarterly, which was selected as an outstanding article by the Association for Education in Journalism and Mass Communication in the United States: Hiromi Cho, Hugh Martin, and Stephen Lacy, “An Industry in Transition: Entry & Exit in Daily Newspaper Markets, 1987-2003,” Journalism and Mass Communication Quarterly 83 (summer 2006): 381-396.