"The State of the News Media in America," co-sponsored by Washington-based think tank the Project for Excellence in Journalism and New York's Columbia University Graduate School of Journalism, showed a trend that mirrors that of other industries -- staff and budgets are down, workloads are up. Some of the cuts are a result of better technology but others were made during lean times and never reversed.

As outlets cut back in response to declining audiences, it may perpetuate a vicious cycle of deteriorating quality and variety that causes audiences to shrink even more, the study suggests.

And, financial pressure has caused some outlets to shrink their "news holes" airtime or page space for news and replace news with advertising.

The report released Monday looked at eight types of news outlets: newspapers, magazines, network television, cable television, local television, the Internet, radio, and ethnic and alternative media.

Mainstream newspapers, network and local television news are losing their audience share, while ethnic, alternative and online media outlets are gaining. Cable news, news magazine and radio audiences haven't declined but are generally flat with the exception of some specialized news publications, like "The Economist" magazine.

Newspapers have about 2,200 fewer full-time professional newsroom employees than they did in 1990.

In network news since the 1980s, correspondents have been cut by a third, workload is up by a third and the number of foreign bureaus has been cut by half. In fact, with the exception of ABC which has a bureau in Nairobi, networks have no bureaus in Africa, Latin America, South America, Africa, India or Pakistan. Formerly single-beat network correspondents such as a health or Supreme Court reporter are now given a larger more general-assignment beat, like health-science or justice, the study said.

In local television, the average workload increased 20 percent from 1998 to 2002. About 59 percent of news directors reported either budget or staff cuts during 2002.

The number of full-time radio newsroom employees fell 44 percent between 1994 and 2001; part-time employees declined 71 percent. The number of news directors that handle five or more stations has also increased from 3 percent in 1999 to about 18 percent in 2003. There is only an 8 percent salary difference for directors that handle single and multiple stations.

For news magazines, over the past 20 years, Time has reduced its staff by 15 percent and Newsweek by a full 50 percent, according to the study. Time has cut its foreign news bureaus by 27 percent and Newsweek by 31 percent the study said. One cost-cutting measure magazines have adopted is to use more contributing editors and writers, who are cheaper as they can be used on an as-needed basis and normally don't get benefits like regular full-time staff, according to the report.

Of the two profitable cable news networks, CNN and Fox (MSNBC has only about broken even, the study said), Fox could be the bellwether of the future of cable -- fewer bureaus, live reports and fewer stories all of which keep costs down. Fox's ratings are also higher than CNN's but ratings are only part of what drives revenues -- CNN's profits are about five times higher than Fox's due to the package deals it sells.

Online outlets have been hiring, but still keep a fairly trim staff on hand and get a lot of their content from "old" media. Online news content is most similar to newspaper content according to the report.

"These facts suggest a difficult environment -- more pressure on people, less time to report stories and more reliance on technology, syndicated material and synthesizing second-hand information," the study said.

"During hard times, many newspapers have made sharp cutbacks in newsroom staffing and expenditures. And during good times, while there are modest expansions, many have not made up for what was lost, particularly in staffing. The lion's share of the growing revenues has been turned instead into higher profit margins. The effect, all evidence suggests, is that newspapers have seen a net drop in the overall number of people and a squeeze on resources devoted to covering the news. The cuts coincide, moreover, with the sharper decline in circulation that began in 1990," the study said.

"The industry should maintain quality during the hard times, and an industry that does not invest cannot possibly grow, create new products and reach new audiences. If the industry is losing readers, lack of innovation and investment -- especially in the last 15 years -- is part of the reason," the study said.

And research shows that more investment in the newsroom and diversifying content resulted in higher circulation, higher quality, higher advertising rates and higher profits, the study said.

Some sources the survey authors consulted said that newspapers' high profit revenues come at the papers' own expense -- "an industry eating its seed corn," -- as resources are kept at a minimum and revenues aren't reinvested back into the business. Others said that newspapers, as a "mature" industry, have lower potential for growth, which justifies keeping operations scaled back. And some said the cuts aren't as severe as they seem; since 1990, there has been a 4 percent drop in newsroom employees which doesn't come close to the 11 percent drop in circulation. Also, 154 newspapers closed down between 1990 and 2002.

But despite diminished audiences, media outlets have been turning a decent profit the study said. In 2003, newspapers made about a 20 percent profit, radio news pulled in about 11 percent of their stations' profit and local television news stations made about 40 percent profit. Online media profits are smaller -- on average only about 2 percent of total revenues for 11 major newspaper companies Web sites -- but made double-digit revenue gains in 2002. Online outlets are predicted to double their revenues by 2005 over 2002 and triple them by 2007 over 2002 the survey said.

In 2002, newspapers had total advertising revenues of just over $44 billion. In the first six months of 2003, advertising revenue was just a little less than $21 billion. And in the first six months of 2003, 13 major newspaper companies earned about 20 percent pretax profits.

From 1991 to 2000, newspaper ad revenues rose 60 percent, and operating profits margins almost doubled from 14 to 27 percent. Profits overall jumped 207 percent. Yet newsrooms saw only a 3 percent increase in staff, which was erased by the downturn of 2001.

One interesting parallel that the study points out is the fact that the advertising revenues that grocery and department stores brought to newspapers disappeared during the 1980s, as these stores consolidated or were replaced by discounters like Wal-Mart.

In magazines, even during the 2001 recession, profits never fell below 15 percent. But ad pages increased a lot more in lifestyle magazines like shopping magazine "Lucky," or "PC Magazine" aimed at computer users, than in news magazines. Ad revenues increased 500 percent since 1995 for niche magazines compared to 300 percent for news magazines.

Of the magazine genres, news led the pack in advertising revenues in 1980 but was a distant third in 2002, far behind entertainment and pop culture, and close to second runner-up, business.

Of all the media outlets, the circulation and revenues of ethnic and alternative media outlets are really booming. Circulation of Spanish daily papers more than tripled from 1990 to 2002, while English-language papers' circulation declined 11 percent, and ad revenues have gone up to seven times their 1990 levels, from $111 million to $786 million, the study said.

Ethnic papers are thriving since a growing number of people in the United States speak a language other than English. Spanish-language papers have an especial advantage because so many nationalities share the same language, Spanish. People from Mexico, Puerto Rico, Cuba and the countries of Central America, South America and the Caribbean can read or listen to Spanish language news.

The report can be viewed at: www.stateofthenewsmedia.org

All rights reserved. Copyright 2004 by United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of by United Press International.

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