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.
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.
Susan Guibert | Eurek Alert!
High in calories and low in nutrients when adolescents share pictures of food online
07.04.2016 | University of Gothenburg
Brain connectivity reveals hidden motives
04.03.2016 | Universität Zürich
Researchers from the Max Planck Institute Stuttgart have developed self-propelled tiny ‘microbots’ that can remove lead or organic pollution from contaminated water.
Working with colleagues in Barcelona and Singapore, Samuel Sánchez’s group used graphene oxide to make their microscale motors, which are able to adsorb lead...
Neutron scattering and computational modeling have revealed unique and unexpected behavior of water molecules under extreme confinement that is unmatched by any known gas, liquid or solid states.
In a paper published in Physical Review Letters, researchers at the Department of Energy's Oak Ridge National Laboratory describe a new tunneling state of...
Honeycomb structures as the basic building block for industrial applications presented using holo pyramid
Researchers of the Alfred Wegener Institute (AWI) will introduce their latest developments in the field of bionic lightweight design at Hannover Messe from 25...
Polymer solar cells can be even cheaper and more reliable thanks to a breakthrough by scientists at Linköping University and the Chinese Academy of Sciences (CAS). This work is about avoiding costly and unstable fullerenes.
Polymer solar cells can be even cheaper and more reliable thanks to a breakthrough by scientists at Linköping University and the Chinese Academy of Sciences...
As one of the leading R&D partners in the development of surface technologies and organic electronics, the Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP will be exhibiting its recent achievements in vacuum coating of ultra-thin glass at SVC TechCon 2016 (Booth 846), taking place in Indianapolis / USA from May 9 – 13.
Fraunhofer FEP is an experienced partner for technological developments, known for testing the limits of new materials and for optimization of those materials...
27.04.2016 | Event News
15.04.2016 | Event News
12.04.2016 | Event News
29.04.2016 | Physics and Astronomy
29.04.2016 | Health and Medicine
29.04.2016 | Life Sciences