Featured Research

from universities, journals, and other organizations

Internet not responsible for dying newspapers, new study finds

Date:
June 10, 2014
Source:
University of Chicago Booth School of Business
Summary:
We all know that the Internet has killed the traditional newspaper trade, right? After all, until the general population started interacting with the web in the mid-90s, the newspaper business was thriving -- offering readers top notch journalism and pages of ads. A new study finds assumptions about the decline of newspapers are based on three false premises.

We all know that the Internet has killed the traditional newspaper trade, right? After all, until the general population started interacting with the web in the mid-90s, the newspaper business was thriving -- offering readers top notch journalism and pages of ads.

But a recently-published study finds that we may be all wrong about the role of the Internet in the decline of newspapers.

According to research by University of Chicago Booth School of Business Professor Matthew Gentzkow, assumptions about journalism are based on three false premises.

In his new paper, "Trading Dollars for Dollars: The Price of Attention Online and Offline," which was published in the May issue of the American Economic Review, Gentzkow notes that the first fallacy is that online advertising revenues are naturally lower than print revenues, so traditional media must adopt a less profitable business model that cannot support paying real reporters. The second is that the web has made the advertising market more competitive, which has driven down rates and, in turn, revenues. The third misconception is that the Internet is responsible for the demise of the newspaper industry.

"This perception that online ads are cheaper to buy is all about people quoting things in units that are not comparable to each other -- doing apples-to-oranges comparisons," Gentzkow says. Online ad rates are typically discussed in terms of "number of unique monthly visitors" the ad receives, while circulation numbers determine newspaper rates.

Several different studies already have shown that people spend an order of magnitude more time reading than the average monthly visitor online, which makes looking at these rates as analogous incorrect.

By comparing the amount of time people actually see an ad, Gentzkow finds that the price of attention for similar consumers is actually higher online. In 2008, he calculates, newspapers earned $2.78 per hour of attention in print, and $3.79 per hour of attention online. By 2012, the price of attention in print had fallen to $1.57, while the price for attention online had increased to $4.24.

Gentzkow also points out that the popularity of newspapers had already significantly diminished between 1980 and 1995, well before the Internet age, and has dropped at roughly the same rate ever since. "People have not stopped reading newspapers because of the Internet," Gentzkow notes.


Story Source:

The above story is based on materials provided by University of Chicago Booth School of Business. Note: Materials may be edited for content and length.


Journal Reference:

  1. Matthew Gentzkow. Trading Dollars for Dollars: The Price of Attention Online and Offline†. American Economic Review, 2014; 104 (5): 481 DOI: 10.1257/aer.104.5.481

Cite This Page:

University of Chicago Booth School of Business. "Internet not responsible for dying newspapers, new study finds." ScienceDaily. ScienceDaily, 10 June 2014. <www.sciencedaily.com/releases/2014/06/140610121904.htm>.
University of Chicago Booth School of Business. (2014, June 10). Internet not responsible for dying newspapers, new study finds. ScienceDaily. Retrieved September 18, 2014 from www.sciencedaily.com/releases/2014/06/140610121904.htm
University of Chicago Booth School of Business. "Internet not responsible for dying newspapers, new study finds." ScienceDaily. www.sciencedaily.com/releases/2014/06/140610121904.htm (accessed September 18, 2014).

Share This



More Computers & Math News

Thursday, September 18, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Let's Review Apple's Latest iPhone Reviews

Let's Review Apple's Latest iPhone Reviews

Newsy (Sep. 17, 2014) The tech press has shared its thoughts on the latest iterations of Apple's iPhone. We summarize the reactions to help you decide: iPhone 6 or 6 Plus? Video provided by Newsy
Powered by NewsLook.com
Facebook Reportedly Building Another New Photo Sharing App

Facebook Reportedly Building Another New Photo Sharing App

Newsy (Sep. 17, 2014) Sources tell TechCrunch Facebook is working on Moments, an app for sharing photos with close friends and family. But why develop yet another new app? Video provided by Newsy
Powered by NewsLook.com
What Not To Do When Installing iOS 8

What Not To Do When Installing iOS 8

Newsy (Sep. 17, 2014) Several sites are warning early adopters not to enable Apple’s new iCloud Drive feature during the installation process. Video provided by Newsy
Powered by NewsLook.com
2K Drafts Face-Mapping Tech for New Game

2K Drafts Face-Mapping Tech for New Game

AP (Sep. 17, 2014) "NBA 2K15" is angling for a slam dunk with an innovative new way to put players in the game. Gamers will be able to digitally graft lifelike 3D renditions of their faces onto virtual players using the PlayStation 4 and Xbox One cameras. (Sept. 17) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins