How the Internet Changed the Market for Print Media

IZA Logo
   

IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 08.05.2018, 12:15 - 13:30

   

Presentation by 

Manudeep Bhuller (University of Oslo)
   

Abstract:

Over the past two decades, the media landscape has changed dramatically: Print media is in decline, and people are increasingly turning to the Internet for information and entertainment. These trends have led to a widespread view that print newspapers are suffering declining readership and revenue because high-speed (broadband) internet facilitates online media consumption without excessive waiting time. However, there is little causal evidence to substantiate this claim, and print media has been in decline for much longer than the Internet has been a popular source of media consumption. In this paper, we analyze how household adoption of broadband internet changed the market for print newspapers. Our context is the Norwegian market for print newspapers over the period 20002014. This context offers unusually rich data on consumers and firms and plausibly exogenous variation in the availability and adoption of broadband internet. We find that print circulation of tabloid newspapers declined by 50% as a response to the increase in internet use, while most of the drop in print circulation of non-tabloid (national) newspapers can be attributed to increases in internet use. Tabloid and non-tabloid newspapers responded to these changes by dramatically cutting costs, either by reducing labor inputs or by reducing average newspaper format. In contrast, local newspaper responded by further reducing their tabloid content and pushing content towards more serious news, and thus were able to mitigate the negative impacts of internet on print circulation. Our study provides some of the first causal evidence on the causes and consequences of the changing media landscape, highlighting how household adoption of new technology affects the demand for existing products and how incumbent firms respond to these changes.

   
   
For more information, please contact seminar@iza.org