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Newspapers in Times of Low Advertising Revenues

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  • Charles Angelucci
  • Julia Cagé

Abstract

We 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.

Suggested Citation

  • Charles Angelucci & Julia Cagé, 2019. "Newspapers in Times of Low Advertising Revenues," American Economic Journal: Microeconomics, American Economic Association, vol. 11(3), pages 319-364, August.
  • Handle: RePEc:aea:aejmic:v:11:y:2019:i:3:p:319-64
    Note: DOI: 10.1257/mic.20170306
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    Cited by:

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    2. Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
    3. Julia Cage & Olivier Godechot & Etienne Fize & Maria Camila Porras, 2017. "Who Owns the Media?: The Media Independence Project," Sciences Po publications info:hdl:2441/5ej8oq8p589, Sciences Po.
    4. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2020. "Media Competition and News Diets," NBER Working Papers 26782, National Bureau of Economic Research, Inc.
    5. Shunyao Yan & Klaus M. Miller & Bernd Skiera, 2020. "Do Ads Harm News Consumption?," Papers 2005.06840, arXiv.org.
    6. Luis F. Aguado & Elisabetta Lazzaro & Luis A. Palma Martos & Ana M. Osorio Mejia, 2018. "Newspaper Reading as a Form of Cultural Participation: The Case of Colombia," Review of Economics & Finance, Better Advances Press, Canada, vol. 11, pages 40-54, February.

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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