If the Internet isn’t responsible for the decline in newspapers…what is?
June 12, 2014 | 3:27 am
Here’s an article from Science Daily that posits that all the claims that the Internet (or, more specifically, Internet advertising) is responsible for newspapers’ downfall are false…but then it doesn’t propose any alternative reasons to replace it.
The article cites a research paper by University of Chicago Booth School of Business Professor Matthew Gentzkow, published in the American Economic Review. Gentzkow looks at the differences in rates and views between on-line and newspaper ads. The perception that the Internet is responsible for newspapers’ downfall, Gentzkow posits, is based on the idea that on-line ad revenues are lower than print revenues, because Internet ads are much cheaper than print.
However, Gentzkow says, this is because people are comparing apples and oranges. Online ads are measured in “number of unique monthly visitors” while newspaper ads are measured in circulation numbers. And people actually spend more time reading than looking at ads.
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.
He also notes that newspapers had actually fallen off in popularity significantly between 1980 and 1995, before the Internet became popular, and have been declining at the same rate ever since. But he (or at least, the piece in Science Daily) doesn’t offer any suggestions why that might be. More people turning to getting their news from television, perhaps? I know my parents never subscribed to a paper when they could get their news over the air for free.
It might also be that there are more factors involved than just the price of advertising, such as the growth of services like Craigslist that stole classified ad revenue away from newspapers…but that wouldn’t account for their pre-Internet-era decline. That’s a puzzler all right.