Newspapers in Times of Low Advertising Revenues
AbstractWe model the consequences on newspapers' content and prices of a reduction in advertising revenues. Newspapers choose the size of their newsroom, and readers are heterogeneous in their ideal amount of journalistic-intensive content. We show that a reduction in advertising revenues lowers newspapers' incentives to produce journalistic-intensive content. We also build a unique dataset on French newspapers between 1960 and 1974 and perform a difference-in-differences analysis exploiting the introduction of advertising on television, which affected national newspapers more severely than local ones. We find robust evidence of a decrease in the amount of journalistic-intensive content produced and the subscription price.
CitationAngelucci, Charles, and Julia Cagé. 2019. "Newspapers in Times of Low Advertising Revenues." American Economic Journal: Microeconomics, 11 (3): 319-64. DOI: 10.1257/mic.20170306
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L82 Entertainment; Media
- M37 Advertising