Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

New study finds Internet not responsible for dying newspapers

12.06.2014

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.

... more about:
»Online »Review »Trading »circulation »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. 

Media ContactsChicago

Susan Guibert
+1 773.702.9232
susan.guibert@ChicagoBooth.edu
Chicago

Ethan Grove
+1 773.834.5161
Ethan.Grove@ChicagoBooth.edu

Susan Guibert | Eurek Alert!
Further information:
http://www.chicagobooth.edu/about/newsroom/press-releases/2014/2014-06-10

Further reports about: Online Review Trading circulation newspapers

More articles from Studies and Analyses:

nachricht Diagnoses: When Are Several Opinions Better Than One?
19.07.2016 | Max-Planck-Institut für Bildungsforschung

nachricht High in calories and low in nutrients when adolescents share pictures of food online
07.04.2016 | University of Gothenburg

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Streamlining accelerated computing for industry

PyFR code combines high accuracy with flexibility to resolve unsteady turbulence problems

Scientists and engineers striving to create the next machine-age marvel--whether it be a more aerodynamic rocket, a faster race car, or a higher-efficiency jet...

Im Focus: X-ray optics on a chip

Waveguides are widely used for filtering, confining, guiding, coupling or splitting beams of visible light. However, creating waveguides that could do the same for X-rays has posed tremendous challenges in fabrication, so they are still only in an early stage of development.

In the latest issue of Acta Crystallographica Section A: Foundations and Advances , Sarah Hoffmann-Urlaub and Tim Salditt report the fabrication and testing of...

Im Focus: Piggyback battery for microchips: TU Graz researchers develop new battery concept

Electrochemists at TU Graz have managed to use monocrystalline semiconductor silicon as an active storage electrode in lithium batteries. This enables an integrated power supply to be made for microchips with a rechargeable battery.

Small electrical gadgets, such as mobile phones, tablets or notebooks, are indispensable accompaniments of everyday life. Integrated circuits in the interiors...

Im Focus: UCI physicists confirm possible discovery of fifth force of nature

Light particle could be key to understanding dark matter in universe

Recent findings indicating the possible discovery of a previously unknown subatomic particle may be evidence of a fifth fundamental force of nature, according...

Im Focus: Wi-fi from lasers

White light from lasers demonstrates data speeds of up to 2 GB/s

A nanocrystalline material that rapidly makes white light out of blue light has been developed by KAUST researchers.

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

The energy transition is not possible without Geotechnics

25.08.2016 | Event News

New Ideas for the Shipping Industry

24.08.2016 | Event News

A week of excellence: 22 of the world’s best computer scientists and mathematicians in Heidelberg

12.08.2016 | Event News

 
Latest News

Spherical tokamak as model for next steps in fusion energy

25.08.2016 | Power and Electrical Engineering

Scientists identify spark plug that ignites nerve cell demise in ALS

25.08.2016 | Health and Medicine

Secure networks for the Internet of the future

25.08.2016 | Information Technology

VideoLinks
B2B-VideoLinks
More VideoLinks >>>