The Newspaper Ad Collapse: Bad News for Readers

Yves here. Although readers are no doubt familiar with the general story, that newspapers, and in particular, news rooms, have taken a huge hit in the Internet era, it’s useful to see long-term data on the trend and implications. Curiously, this account fails to mention the most deadly development: that classified advertising, rather than display ads, represented half of most newspapers’ ad revenues, and Craigslist did that in.

Another issue I rarely see acknowledged for why readers are not willing to pay much for online versions versus print isn’t just that online news outlets are competing with free site that provide headline news, such as CNN and BBC. A secondary but still important issue is that even in the era of tablets, online media has not come up with anything remotely approaching the efficiency of scanning stories in a print paper. I only buy physical newspapers when flying, and every time I do, I see and read stories there that I never would have found online. While I regret missing them, the fact is I would not read them if I got a print subscription until I did my typical daily gym stint, on the treadmill, which means a good 20 hours or so after they appeared (buried but nevertheless there) online. So for me, they would still make for useful background but wind up being not on the critical path for blogging and thus fall by the wayside.

By Charles Angelucci, Assistant Professor, Finance and Economics Division, Columbia Business School and Julia Cagé, Assistant Professor in Economics, Sciences Po; CEPR Research Fellow. Originally published at VoxEU

Advertisers are deserting newspapers. Using the impact of television advertising on print media in 1968, this column argues that a reduction in advertising revenues will reduce the quality of newspapers. Ultimately, this may result in a less well-informed public.

The year 2015 was perhaps the worst for the newspaper industry since the recession. According to the Pew Research Center (2016), in the US total advertising revenues (print and digital) among publicly traded companies declined by nearly 8%.

In a recent paper (Angelucci and Cagé 2016), we investigate the consequences of the collapse in advertising revenues on newspaper pricing and quality choices. These choices are important because they help determine how well-informed individuals are. This in turn influences voter turnout, political accountability, and social norms (Ferraz and Finan 2008, Jensen and Oster 2009, Gentzkow, Shapiro and Sinkinson 2011).

Specifically, we analyse the consequences of a decline in the advertisers’ willingness to pay for newspaper readers’ attention triggered by the arrival of new advertising platforms. In 2015 Google and Facebook had captured almost two-thirds of the $60 billion online advertising market. This shift in advertising revenues toward social media has contributed to a collapse in newspaper advertising revenues.

To investigate the impact of these shocks, we built a simple model in which a newspaper sells content to readers, and also sells reader attention to advertisers. We show that a decrease in the advertisers’ willingness to pay for reader’ attention induces the newspaper to decrease the quality of its content. Advertisers’ lower willingness to pay for newspaper readers leads to less ‘subsidisation’ of readers through low prices, which creates upward pressure on reader prices, it also leads to less ‘subsidisation’ of quality (which also serves to attract readers). Whenever readers are sufficiently sensitive to quality, a decline in advertising revenues leads to a decrease in subscription prices to compensate readers for lower quality. We also show that a decrease in advertisers’ willingness to pay increases the newspaper’s incentive to price discriminate between readers: in addition to decreasing its subscription price, the newspaper increases its newsstand price.

Clearly, a number of factors determine newspapers’ pricing and quality choices, including costs, consumer preferences, and market structure. In addition, the rise of the internet brought about numerous far-reaching changes in terms of competition and consumer habits. According to the Reuters Institute Digital News Report (2016), for example, half of consumers report using social media as a source of news each week. As a result, establishing empirically the causal relationship between advertisers’ lower willingness to pay for newspaper readers, and newspapers’ pricing and quality choices, is difficult.

There is a precedent for this: the impact of TV advertising on newspaper business models. We built a dataset of French newspapers between 1960 and 1974 and perform a difference-in-differences analysis of the introduction of advertising on French television in 1968. This led to an exogenous shock that exclusively shifted newspapers’ reliance on advertising revenues.

We made the assumption that advertising revenues had affected national daily newspapers more severely than local daily newspapers. Looking at the advertisements broadcast on television at the time, and those published in newspapers, supports this assumption. National newspapers relied to a greater extent on advertisements for brands whose owners may also wish to advertise on television. More advertisements in local newspapers were local in nature. To illustrate the magnitude of the shock, national newspaper advertising revenues decreased after the introduction of advertising on television even though the total French advertising market expanded between 1967 and 1974. In contrast, local newspaper advertising revenues increased during the same period (Figure 1).

Figure 1 Advertising revenues by media outlets, 1967 and 1974


The introduction of advertising on television led to a 17% decrease in the advertising revenues of national newspapers compared to local newspapers. This drop in advertising revenues led to a 12% decrease in the price ratio, defined as the average subscription price divided by the newsstand price, entirely driven by a decrease in the price charged to subscribers. National newspapers used 11% fewer journalists compared to local newspapers, and the surface of national newspapers dedicated to news (the ‘newshole’) decreased by 7%. Assuming these statistics measure quality, we can conclude that national newspapers reacted to lower advertising revenues by decreasing the quality of their content. Overall, these changes in price and content lead to a 22% increase in the share of subscribers among all readers.

We believe our findings have implications for 21st-century news media. Many media outlets are still experimenting to discover optimal pricing policy. Our model suggests the logic behind using subscriptions as a means to price discriminate between readers should also exist online. Since 2010, an increasing number of online media have abandoned exclusively advertiser-financed models to introduce paywalls, and a large number have chosen to offer subscribers unlimited access to their content while charging a high price to the readers who purchase only individual stories. We also find that, in recent years, the ratio of the average subscription price divided by the newsstand price has decreased (Figure 2).

Figure 2 Average annual price ratio for seven US newspapers, 2008-2014



Our analysis highlights that a decrease in advertisers’ willingness to pay for news readers – whatever its causes – lowers media outlets’ incentives to invest in quality. As advertising revenues have dropped, so too have the number of newspaper journalists in the US (Figure 3). If advertising revenues continue to decline, the quality of information at the media outlet level may decrease too. This risk is made stronger by a recent growth in ad-blocking technologies (Reuters Institute Digital News Report, 2016).

Figure 3 Newspaper advertising revenues (in dollars) and number of journalists in the United States, 1980-2015


If advertising is no longer going to subsidise newspaper quality, future research should investigate the value of possible policy interventions.

See original post for references

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  1. Julian

    Why is it so commonly assumed that newspaper revenue/advertising income automagically correlates with quality reporting? I’ve yet to see any factual substantiation of that line of reasoning. I mean, certainly high ad revenue (also) leads to all kinds of moral hazards (such as not reporting too harshly on the nefarious tobacco industry killing millions of people).

    It seems to me there’s a bit of nostalgia in play here, but in reality I see really very little reason for concern or to mourn the demised ad-revenue dependent old media. If anything, if you have a real message with real content (such as many NC articles) it is easier to get your voice out there thanks to technology.

    I’m not sad to see the old media suffer, which commonly do not add value (and will certainly not be adding any more with “state-sponsored” news outlets – imagine how critical they will be of their new overlords – or any other sort of government interventionism.

    1. Foppe

      Yes, it’s easier to get your voice out there, but the flip side (due to the near-death of local news) is that there is no real platform (yet) where people can learn about what’s happening in their quasi-local communities, mostly because there isn’t all that much money to be made there. (I mean, I could imagine there being a reddit/kos-like platform where you could just tag your own blogs to relate to certain areas/interests, that can then be upvoted / aggregated, but the point is that there isn’t something like this, yet. This may be because of how newspapers were historically tied in with the generation of nationalism, and have something to do with the fact that (online) we are less willing to accept ideologically driven news-reporting (which you get quite a lot of), so that there isn’t all that much willingness to pay for these efforts except insofar as it comes bundled somehow, thus forcing you to buy the whole package (like the academic publishers do? — snort). Either way I would think that such a platform would have some value — I’m just not sure how it could/should be financed (in a way that couldn’t be gamed).

      1. Carla

        I agree that the greatest loss may be on the local side, and the loss of all classified advertising to Craigslist that Yves cites is absolutely germane in this case.

        I cancelled my print subscription to our local paper when they decided to print 7 days a week but deliver only on 4. Their online site is free to access but horrible. It is very sad to be without the local news I once relied upon.

        Now almost every major daily NC links to is behind a paywall, or permits only a few free reads per month. Are we really expected to pay for online subscriptions to 5 or more different news sites? I still get the Sunday Times in print ($8.50 a week, thank you very much), and so have a “free” online subscription to the NYT.

        Yes, going to Google and typing in the article title sometimes works–thanks to those that have offered that tip!

        1. Robert Hahl

          You give the New York Times $442/year? I won’t even click on their links. I wish NC would ignore them more.

            1. polecat

              What term does one use when referring to sites such as Yahoo, the Huffington Post, Daily Kos….. couldn’t they also be considered part of the MSM…..?…..or are we to consider only print and tv/cable media in that realm?

        2. Michael

          Try this: If you know the link will go to a paywalled site (e.g. NYT, WaPo), then right-click the link and click “Open in an incognito window”. That’s what it’s called in Chrome, in Firefox it’s called a “New Private Window”

  2. PlutoniumKun

    I blame NC for my failure to subscribe to any media. I keep finding that this site is so much better than the newspapers I used to buy or browse.

    1. JohnnyGL

      NC acts as my filter for news. Yves and Lambert have more control over what goes into my brain than Google or any search engine.

      I used to buy the FT or Economist years ago, but I just more or less redirected my subscriptions that I used to pay to them over here in donations, instead.

    1. Carolinian

      If only that were true. I believe that for some time his tv properties have been subsidizing his newspapers which lose money. He owns newspapers for the political power it gives him.

      As for the above article, it’s a useful reminder that it is probably television that has done greatest harm to the news business with the internet simply delivering the coup de grace. Which is to say this process has taken place over decades. The great hue and cry about the debut of the “dumbed down” USA Today now seems almost quaint. And in fact the internet provided a place for people to once again read long and thoughtful articles and that made it in some ways the antidote to tv. However sounds like mobile and social networks and Youtube are becoming the web version of tv and a form of television that is more readily faked. M of A talks about this a lot on his site.

      1. EGrise

        He owns newspapers for the political power it gives him.

        Jeff Bezos figured out that trick too.

        1. Buffalo Cyclist

          It’s not a coincidence that (1) Bezos owns the Washington Post and (2) the Post was the most stridently anti-Sanders major newspaper.

          1. Lambert Strether

            And now the most stridently anti-Trump. The front page on the Internet version is simply extraordinary, and you can’t tell the ***cough*** reporting ***cough*** from the editorializing. It’s just a ginormous dogpile.

  3. Alex morfesis

    Craigslist may not hold another 5 years as its “free” model is just an ugly mess to deal with for real estate…but the death of newspapers is self induced…the end of upi as a non wool-itzer directed enterprise left AP to become “$talepee”…it has been decades since most papers had any “reporters” running around digging up real news…they eat up what “evah” the pr firms feed them or pr type wire services and mostly cut and paste…it all is almost the same same…and the net versions of stories dont have “more in depth” data either behind a paywall or in print, there is little “added value” delivered…and they tend to all access the same “experts” databases…

    On the other hand…the chicago reader still has kept its share of real estate ads, despite charging 30 bux a pop…and has 4 times the number of ads (10 thousand plus) as the “free” craigslist ads…

    Most classifieds in newspapers have, from my experience, useless user interface, with the queries designed by some questionably carbon based lifeforms sitting in front of some screen somewhere on this little blue marble we all dwell in/on…

    Googol simply took the ron popiel, pay per inquiry/pay per sale late nite call the number on your screen ad model and converted it onto the web…and they did it first/best…

    Media companies have a product, ad space, they let sit fallow for lack of “cash” buyers…they wont usually “work” with anyone…

    When I kept the “congress” theater across the street from the offices of “in these times” from being turned into a furniture store when the great vincente Fernandez and his cuban partners “bolted” from their long term lease, one of the things I was able to do was swap out/barter tv ads on the local spanish network in return for jv with them for future acts they wanted to bring to chicago…and then traded those ads for other media, including a printer who was doing pluggers for most of the raves at that time around chicago…i knew we could keep the doors open for a rave since the chicago ordinance allowed you to keep a movie house open 24 hours as long as you were “projecting”(chicago via the complaining of the local bent noses who controlled the “big” & small acts, had been shutting down raves)…

    we worked with facets and others to source and run “silent films”…

    eventually ended up with medusas which led to house of blues…

    all from a media company willing to work on sustaining a business and creating growth…

    Local media today seems to be run by parties who want it to die…

  4. Aaron Layman

    Thanks for explaining the crapification of our local paper, the Houston Chronicle. Over the past few years I have seen the online version stacked with more and more ads/pop-ups. We’ve also been bombarded with an endless supply of stories about luxury real estate, you know because everybody in Houston is living the vida loca. The “real estate” desk seem to be utterly incapable of doing basic fact checking on stories that they run. Some of the pieces have been so bad I have called the business editor to complain, but to no avail. They don’t seem to care about journalism in the slightest.

  5. Norb

    The real demise of an informed public was brought about by the destruction of public spaces. The space between commerce and an individuals right to exist free from influence or persuasion has dropped to near zero.
    As a result, two-way communication between citizens is destroyed and replaced by sales propaganda. Everywhere.

    By allowing unrestricted advertising to invade every possible public space, the noise level needs to continually rise to make an impression. In the case of local print media, once the proportion of interesting or important information is swamped by business adds, and “news” stories slanted to promote or obfuscate actual issues, an “informed” person logically concludes they must move elsewhere for their information or enjoyment.

    In another sense, the internet, while promising to be a great liberation for individuals is on the same path that befell newspapers. Business and commercial interests will lock down and crowd out any semblance of a free and open forum made possible in the first place by collective public action. The infrastructure, while maintained publicly will be run for narrow private interests.

    Until it is generally accepted that it is more important to protect and promote the health of public spaces in all forms, the corporate stranglehold will continue, to the demise of everything it touches. Without dissent, and a forum to work out that conflict, tyranny reigns.

    Large corporations will be the destruction of us all.

    1. DWD

      Good post.

      IOW, no disagreement from my end.

      And the infusion of advertising into everything serves no useful purpose that I can think of. To old people like me it is an annoying intrusion: I would rather watch a show on Netflix or Amazon Prime, even if the show is not quite as good as broadcast TV — seldom happens, BTW — because of the advertising.

      1. Pavel

        That “infusion of advertising” drives me around the bend. US television “content” is now just a wrapper around the commercials. (It is even worse in other countries — try watching Japanese television!) Even worse, everything — every bit of visual space — has been sold for marketing purposes: the sides of buses, the black cabs (no longer black) in London, the back sides of subway or tube tickets… If I print out a Eurostar e-Ticket 1/3 of the page is covered with an advert of some sort (last time it was McDonalds — I blanked it out before printing :). And then CNN cleverly has TVs in all the airport terminals playing their “news” and ads incessantly (they boast about this to potential advertisers).


          1. DarkMatters

            Meaningless distraction is just the ticket for preventing those pesky independent ideas from popping up.

          2. jgordon

            Local Walmart now has TVs in the checkout lines blaring ads. I used to be annoyed by people who walk around with headphones on and not paying attention to their surroundings… But now whenever I’m in the city I walk around with headphones on and refuse to pay attention to my surroundings. I utterly refuse to let any sort of advertising steal my attention or hijack my thinking.

  6. ProNewerDeal

    Eyeballing the graph: ~44K daily newspaper journalists in 2001 to ~14K in 2015.

    I’d have to guesstimate that at least 1K of this 30K were earnest, talented, dedicated truth-seeking journalists (ala Yves & Lambert, Paul Jay from The Real News, Robert Parry from Consortium News, etc) that were involuntarily unemployed & are now Type 1 Overqualified Underemployed doing some such as driving Uber or stocking shelves at Walmart, etc. I’d assume a tiny fraction were like Baltimore journalist David Simon who became TV author/director with The Wire, who found a career with at least the same pay & interest/enjoyment level as their former journalist career.

    What a tragic waste of human capital, for the individuals affected & the resultant harm to the public’s knowledge.

    BTW this cohort must be affronted of any sense of fairness when PTB stenographers (“No Talent A* Clowns” (c) Office Space) like Chuck Todd/ Chris Cuomo/ Thomas Friedman/ David Brooks/etc are treated as “Very Serious Journalists”. Perhaps the journalism field is more an anti-meritocracy than it is a meritocracy?

    1. John Wright

      One can look at the columnists/journalists who “disappeared” from the Times such as Bob Herbert, Chris Hedges, and Frank Rich and believe that questioning authority or elites is not appreciated at the Times.

      At least Judith Miller is gone..

      Before I quit the local Northern California paper (owned at one time by the Times) I suggested they improve their delayed reprinting of Tom Friedman columns by appending some of the top Times readers comments, who are frequently quite skeptical of Friedman’s wisdom/guidance.

      I thought this might make the local editorial page far more interesting as local readers would see that Friedman’s slavish devotion to the well-connected is questioned by others.

      I was told my comment was forwarded on, but my suggestion was ignored.

      The local paper is no longer delivered to the house.

      The Times eventually sold the local paper to a Florida chain, that re-sold it to some politically connected locals.

      The Times has been pulling punches for a long time, witness the TImes’ behavior in the run-up of the Iraq War, the Times suppression of its knowledge of US government surveillance before the 2004 election, the Times’ non-coverage of Bernie Sanders and its early endorsement and blatant support of the deeply flawed HRC,

      Furthermore, given that Snowden believed the UK Guardian would handle his leaked information properly while the Times would not, perhaps having the Times disappear from the national stage is not a bad thing.

      Maybe the Times is simply on an irrevocable path to irrelevance?

      While I still subscribe to the on-line Times, I am seriously thinking of dropping it after the election.

      1. DarkMatters

        At least Judith Miller is gone..

        Fear not: She was just the patsy. Her ex-boss, Michael Gordon thrives. His byline was conspicuous on some of the “Putin the Antichrist” articles back in spring/summer of 2014. We got so disgusted with his Russophobic coverage that we canceled our subscription. Delivery nevertheless continued gratis for the better part of a year afterwards. We joked that NYT was more concerned with our daily propaganda dose than taking a profit.

        I’m expecting to hear more from him once the election heats up.

      2. Buffalo Cyclist

        Its not just the NYT that does that. Look at how the Washington Post terminated Harold Meyerson. Or how MSNBC got ride of Phil Donahue, Ed Schultz, Melissa Harris-Perry and Dylan Ratigan.

      3. aab

        If you do cancel, keep checking your account records. The Times is notorious for “uncancelling” you and charging you. It happened to us. I did the cancelling and the spouse does the bill paying, so he didn’t think about it when the Times popped back up as an autopay. It was almost a year before I realized what had happened.

    2. Lambert Strether

      A lot of them are still writing, except for peanuts. There’s really an extraordinary amount of good writing, and lots of interesting scholarship, out there, but it’s virtually impossible to find. Meanwhile, our vaunted search engines give us 40 separate links to the same wire service story…

  7. DWD

    Articles like this are upsetting because they are still missing the damned POINT.

    IF there is information in the papers that is ONLY available in the newspapers – longer stories, back stories, good writing, local reporting that is more than reprinting of PR Releases, investigative pieces that are worthy of the name, and a watch on the electronic media and their many many sins – people WILL gladly pay for the thing.

    But you have to offer a product that appeals to the segment of the population that actually reads and has an interest in something beyond the local news blurb uttered by the “impeccably coifed cookie-cutter clones”* of the broadcast industry.

    Instead newspapers have done just the opposite of what they should have done: instead of appealing to their natural constituencies of well-educated, politically active readers – they attempted to dumb the things down to the point of irrelevance: unfortunately they succeeded (And this will be an increasing detriment to the public’s knowledge.)

    * That’s a phrase from my novel, SANCTUARY. Might be my favorite alliteration ever. :)

    1. flora

      Yes. See what happened to many excellent newspapers when they were bought by interests only focused on ‘the bottom line’, not on the business of reporting the news. See, for instance, what happened to the once excellent LATimes when it was bought by Tribune Publishing. Cut the newsroom staff, cut the reporting staff, beef up marketing.

      1. Ivy

        The Chandler family, former owners of Times-Mirror, sold out before the peak to the Tribune/Zell people, with plenty of tax benefits all around, and that was the beginning of the end for journalism in Los Angeles. The LA Times still has some good articles and writers, but fewer than previously.

    2. jgordon

      Exactly what I was thinking. I won’t read a newspaper, any newspaper, even when it’s given to me for free because I’m not in the habit reading the pravda-esque low quality hack writing approved by corporate/government defacto censors in newspapers.

      The idea that I’m supposed to feel that there is a problem because people aren’t looking at the ads surrounding their low quality biased trashy stories is both amusing and offensive to me.

  8. Pavel

    Those print publications that deliver real “premium” and original content and do so cost-effectively can still survive and even thrive. This may be easier for a weekly than a daily newspaper, however. I’m thinking of Private Eye in the UK (more profitable than ever, I believe) and the similar satirical weekly Le Canard Enchaîné in France. Notably these two have minimal web presences, especially Le Canard:

    Non, en dépit des apparences, « Le Canard » ne vient pas barboter sur le Net. Ce n’est pas faute d’y avoir été invité par des opérateurs plus ou moins bien intentionnés, et parfois par des lecteurs qui aimeraient bien lire en ligne leur hebdomadaire préféré. Et surtout, par les canetons expatriés, qui ne reçoivent parfois leur journal, à l’autre bout du monde, que plusieurs jours après la parution.

    Mais notre métier, c’est d’informer et de distraire nos lecteurs, avec du papier journal et de l’encre. C’est un beau métier qui suffit à occuper notre équipe.

    Une palme dans la cyber mare

    When I am in London I still buy The Guardian (which has really deteriorated recently in its anti-Corbyn and pro-Hillary tendencies alas) and when in the States I’ll still pick up the NYT. It’s certainly true that the print version is more pleasant to read, and I find stories I wouldn’t find on the web sites. Of course it is a vicious circle for them: fewer readers means raising the prices, and the millennials probably haven’t bought a newspaper in their lives. The Grauniad is losing shitloads of money (and pissing off its most loyal readers with its politics)… at some point it may go web-only as did the Independent recently.

    I feel very sad… I am a newspaper junkie, and have read papers around the world. I much preferred the earlier versions of those papers — the glorious black-and-white pages of the Guardian, the Times (the Old Grey Lady with its 8 columns of type), Le Monde. Somehow they all seem cheapened now. Just getting old and grumpy I suspect.

    [Apologies… a bit of a ramble! Need to have a cup of coffee!]

    1. Jim Haygood

      “C’est un beau métier qui suffit à occuper notre équipe.”

      So it’s “all about us” — a sentiment as French as boulangeries, Citroën 2CVs, and la tour Eiffel.

      I’ll bet they didn’t laugh at “Let’s parler franglais” in the late Punch either.

  9. TedWa

    Basically, newspapers are no longer a check on the other 3 estates – or the new 4th estate, Wall St – so why should anyone care about print? That’s why I stopped reading print. There’s many factors working against the success of print, including themselves. Why it’s almost as if newspapers were seeking complacency amongst the citizenry, naw, couldn’t be.

    1. Foppe

      One argument in favor is that the sensible & meta-journalists need the ‘raw’ data to reinterpret, as it is impossible to keep track of things otherwise.

    2. fs

      The Old Media is mostly establishment reinforcing trash. But, they did have news desks. People could actually go out, do investigative reporting. True, many citizen journalists and whistleblowers do the same function, but it is not the same.

    3. Ivy

      Much journalism in the US stopped being a legitimate Fourth Estate as the neo-liberal model became more entrenched. The only estates now under consideration are those of the owners.

      LBJ (paraphrasing) talked about how he knew it was over when he’d lost Cronkite. What about the rest of the country that has lost almost all of the rest of what was once a more respected medium?

      1. polecat

        “The only estates now under consideration are those of the owners.”

        So say one of our ‘betters’ Dianne Feinstein ….. and her ilk !!!

  10. makedoanmend

    NC, and a few other sites, have all but replaced the newspaper in my life. (Also, I don’t watch TV.) I haven’t bought a ‘hard copy’ in over c. 15 years and feel more informed about the world since that day c. 15 year ago.

    Once in a while I spy a Sun or Mail headline that is so at variance with my own reality that I just have to laugh at their headlines. The Gurrdian has become such a such a babble of intentionally confusing stories and crossed messages that it is little more than an obfusticating method of modern propaganda – appear to be one thing but really just is another mouthpiece for the TINA doctrine. Distort every story and omit most everything of value.

    The free paper distributed in and on transportation in the UK has the news content of a bubble gum wrapper. Haven’t looked at one in over a year.

    All in all, they are bad products. They have become, as the saying goes, crappified. Mostly they just spout someone’s opinion of “highly selected” events. I have my own opinions. I do not need to buy someone else’s, thank you.

    If I wouldn’t buy rotten food, why would I buy rotten newsprint?

    1. fs

      The Guardian is strictly social identity politics at this point. Their shameful drumb beat and ignorance of the nature of the migrant crisis’ potential is offensive. They attack anyone that impedes that agenda, even to the point of criticising concern for the rape victims at New Years.

  11. JCC

    All good points here, but it’s not just T.V. and the ‘Net. Newspapers were also a part of a social fabric that no longer exists.

    For example, years ago, when living in Ithaca, NY, a group of us used to get together every Sunday morning at a locally owned dockside cafe with outdoor seating for breakfast. The tables were relatively large enough to hold 4 or 5 people and a large breakfast for each… and room for the stack of the local paper and Sunday Times. We would spend a couple of hours hashing out the local social happenings and share out the local and national paper news and comments while enjoying breakfast.

    Today it is chain restaurants with tables barely big enough to hold the plates of breakfast for four people, and that’s after piling up all the table advertisements off to the side (not to mention that a copy of the Sunday Times costs as much, if not more, than an individual breakfast).

    This is only one small example of the “surroundings” of our social lives, I’m sure others can think of many more that affect newspapers in general.

  12. makedoanmend

    Oh, and I think of the trees that won’t be cut down. That makes me feel a whole lot better than being “informed”.

    Plenty of library books, and some class second hand book shops, to keep me informed.

    And speaking to people, who often like to repeat the news as news, keeps me informed as well. And talk is, surprisingly, cheap.

  13. Fred

    “This in turn influences voter turnout, political accountability, and social norms “ “Our analysis highlights that a decrease in advertisers’ willingness to pay for news readers – whatever its causes – lowers media outlets’ incentives to invest in quality. “

    The pushing of a political viewpoint and a demand for social conformity to it has absolutely nothing to do with subscribers cancelling print media subscriptions. Meanwhile lower circulation means ads cost less and print outlets thus get less revenue? Maybe they should teach Econ 101 in schools of journalism, they’ve certainly got the “science” of politics covered.

  14. TedWa

    The chilling of the 4th estate has been going on a while and this is it’s inevitable outcome, irrelevance. From journalists being “embedded” in platoons so they’re protected from the enemy and real news, to Obama’s tapping of AP journalists and prison for whistleblowers AND reporters that cover the story in an elastic catch-all security state of national secrets that must be protected at all costs.
    Newspapers realize that truth in a kingdom of lies is treason and they don’t want their heads on the chopping block. No ad revenue? You can’t blame the advertisers for that.

  15. Pelham

    I worked in newspapers for 30 years and concede they had enormous shortcomings, blind spots and biases. Advertisers were an influence, but in my estimation the perceived sensitivities of readers were the biggest routine influence steering papers away from certain important stories and coverage and toward lesser subjects.

    That said, there were unpredictable instances when great and not-so-great newspapers would rise to the occasion and produce outstanding journalism. But this often required the exceptional commitment of editors and publishers and the ability to dedicate resources to a project that, in the end, might not pay off with a big story.

    It’s those resources and that commitment that are rapidly fading and raise the question of why newspapers need be so exquisitely dependent on advertising for revenue. Robert McChesney of the University of Illinois has proposed a tax credit solution, and there are probably other ideas out there. But this addresses only one problem, as Yves notes, since newspapers don’t quite fit any longer into readers’ daily and increasingly digital media routines.

    Point taken. But it also seems to me that there’s an additional problem in the fact that people are increasingly working hours far beyond the 40 a week that once was the norm. Perhaps if we returned to a 40-hour workweek, readers would have enough quiet time to indulge in by far the most efficient form of news delivery — ink on paper.

    1. DWD

      Another idea I have been in favor of for like, forever is an access fee to the internet that would be distributed to the sites that monopolize a person’s time on the web. ie, if you spent a considerable amount of time reading Naked Capitalism, they would get a monthly check from a supervising entity.

      Contrarily if you don’t bother with things like the WaPo any longer (how the mighty have fallen!) they would receive no income.

      And I believe there is room in the current rates to actually provide some revenue for content providers with even raising the damned too high rates.

  16. inode_buddha

    You know what will really blow your mind? When I was a paper boy nearly 50 yrs ago…. I learned that the paper doesn’t actually make much money off your subscription or delivery fees. The real money was in the advertisers. Anything more atop that was just gravy for the editors.

    (PS Yes I remember getting 50 papers out thru snow up to my knees at 5 AM… then going to school, dodging bullies and getting a NYS Regents…)

  17. readerOfTeaLeaves

    Thanks so much for covering this topic, Yves.

    An oddball observation: I’m convinced that the use of databases could greatly enhance economics. And not a minute too soon, as it moves economics from ‘theory’ to more practical engagement with reality:

    We built a dataset of French newspapers between 1960 and 1974 and perform a difference-in-differences analysis of…

    On a personally level, I think there are serious, systemic, profound linkages between the woes of newspapers and the political craziness we see. But that’s a whole other topic…

  18. Jeff Z

    Two of the best reads in addition to McChesney are these.

    Entman, Robert. 1989. Democracy without citizens: Media and the decline of American
    politics. New York: Oxford University Press.

    Isaacs, Norman E. 1986. Untended gates: The mismanaged press. New York: Columbia
    University Press.

  19. Bernard

    Here in New Orleans. the Times Picayune has become a sports rag, and only publishes a few days of the week. The owners fired most of the people who were there for decades, and refused to sell to those who wanted to keep the daily schedule. Crapification. and they publish now from Mobile, Ala. It was a real stink that the owners took the money and ran, after all the howling and offers to buy it out, just to keep it here and a real daily. we loved our paper, but now the Advocate of Baton Rouge has moved in and supplanted the Times Picayune.

    Greed triumphs. Isn’t America great?

  20. Phichibe

    I’ve heard David cay Johnston on many occasions remark that the coming years were going to be a gold rush for local corruption now that most papers have closed their city hall desks. Go back and watch “The Front Page” and the scene with a dozen stringers in the press room at city hall. All gone. Sad.


    1. fs

      Buffalo we still have an excellet ALT local, the Art Voice, though it was recently bought by the Niagara Falls local, a Libertarian outfit. They do well covering government, complete blank on private business, of course. We also have the Buffalo News (a Warren Buffet outfit), but that’s mostly crap. The latter fact reinforcing my point, traditional corporate news was a strictly top-down affair, with the line set by the owner, top share holders, or editor. The same fact is behind why our academic-industrial complex is milquetoast and a fountain of lies.

      1. fs

        Oh, also we have the ex ellent BUffalo Beast, the paper that outed Walker and Koch in Wisconsin. I highly recommend it. It was originally started by Matt Taibbi.

  21. Anon

    This is an Inside Baseball comment (so some may not understand).

    To read online news sites without the adverts/pop-ups, etc., get Ghostery or employ NoScripts. To read online sites that restrict articles read per week/month, get CC Cleaner to clean out your online “cookies” easily and get back to doing what you do.

    Don’t bother reading the NYTimes (in print or online).

  22. TomGreenwell

    Angelluci and Cage assume that as advertising revenue declines reader revenue holds constant. That assumption doesn’t allow for the possibility that a paper can induce readers to pay a premium price by differentiating content in a way that strongly appeals to a market segment.

    It’s true that over the course of the last century a differentiation strategy didn’t make sense. That’s because for about a hundred years, newspapers got around 80% of revenue from advertisers. Advertisers’ willingness to pony up so much for audiences created a specific set of structural incentives around newspaper content. Readers may have desired highly differentiated content, often along partisan or ideological lines. Advertisers, on the contrary, collectively demanded the largest possible audiences across the political spectrum (although with an obvious preference for readers with higher disposable income).

    In other words, advertising revenue reduced the economic influence of readers’ desire for differentiated content. In an 80/20 environment, it was a smarter editorial strategy to adopt a pose of neutrality, and seek to persuade a mass readership to pay a low cover price, than to market a paper to a segment willing to pay a premium price for differentiated news content.

    That’s changed. We’ve now returned to the situation that prevailed in the nineteenth century in which a majority of news revenue tends to come from readers ( So the analytic question becomes how news sites respond to this new set of incentives.

    In terms of the experience of French newspapers upon the introduction of TV advertising 1968, the question, as it applies to today’s context, is how much it altered the ratio of advertising revenue to reader revenue. I strongly suspect advertising revenue would have continued to be 60% + of total revenue.

    With respect to the deeply worrying decline since 2008 in newspaper journalists employed, the question is whether this is permanent or whether, over the medium term, news sites can build reader revenue through differentiation.

  23. sharonsj

    Re TV ads now being the norm: I wonder what kind of research these companies have done? When ads come on the TV, I either switch the channel or leave the room. If I had the money, I’d get that gizmo that allows you to play something minus the advertising. I’m also thinking of giving up satellite TV entirely; it costs too much just to see a few decent programs and, of course, there is no longer any news on the news (which is why I read NC daily).

    Re newspapers: So much depends on what city you live in or near. The cities near me in Pennsylvania have terrible newspapers with not much news and certainly nothing in depth. But the on-line news often isn’t much better. I used to read HuffPo daily but they seem to have gotten rid of their journalists and now run pieces that originally appeared elsewhere. Too many sites just repeat crap they’ve picked up and rerun without bothering to check a single fact. I often end up doing my own research just to find out the truth–and how many people have the time for that nowadays?

  24. Sound of the Suburbs

    A recommended read, especially if you are American.

    “PR! A Social History of Spin” Stuart Ewen

    It goes into how the US media started out and how it was informative once.

    PR is only about 100 years old and its skills have advanced over the years and its use of the main stream media almost total now.

    US businesses noticed the effectiveness of propaganda during the First World War when most Americans were against it. The American people were successfully coerced into supporting it.

    “Public Relations” sounded better than “Propaganda” for use in peace time but there is no difference at all.

    It goes into how advertisers used their power to put favourable stories into the media.

    Today the mainstream media has become a joke and it has got so bad everyone is beginning to notice its reality and their reality are two different things.

    Newspapers are committing suicide and they only have themselves to blame.

    The UK press is no better by the way.

  25. Russell

    My career plan as a writer was to return to journalism if I did not make it as a fiction writer. When ready to go to that plan B, for which I had credits, it was said, “Well they are firing all of the journalists now.” That was probably in as late as 2007.
    There was the other flaw of not being in it and making friends and contacts in journalism.
    Far as if I was looking for work now, there is really nobody I can call that would immediately put me on a job, as was the case some desperate times in NYC with the Grip Truck.
    I cannot physically function as a gaffer or grip anymore anyway, and not many if any of my friends moved up out of the technical fields. Most really had no great ambitions to even do such a thing.
    There are things I could teach, and I could direct from a chair. I have a big art show for me, coming up in a week.
    Art Shows don’t get much reviewed. The music venues pay for advertising of their shows more so they get the manpower. Art show or Rock Concert, where might the reporter meet the most likely hook up? enters into the thing as well.
    I am playing some instruments I made at my show.
    I am proud that the last book was put in the 12 to 18 year old category.
    You have to think that with the money people pay for internet service some will have to be diverted towards the journalists. I am not saying that I can stand how NC Public Television works, or NPR who has to be complimented on their model entirely dependent on higher quality to inspire donations.
    So with manufacturing gone, the sort of jobs everybody railed against as soul numbing, but misses, and the job of detectives or witnesses contracting to the minimum, and then you hear of websites that require no coding, of course, wondering if you could stand that job, and then you look at NAFTA and CAFTA and the TPP that will be shoved down our throats once the Clintons take over from President Obama, what will there be to do?
    Remember the gas station attendant jobs? I think there will be robots to repair.
    Robots are not near as transformational yet than they could be.
    I have a plan, It is mine, so I might change it. Might have no choice.
    There is work in the oceans cleaning up. Who will pay?
    Saudis pay for cleaning in their Gulf. They have had spills we ain’t heard of.
    I think of William Shirer who was a journalist and became a great and important historian, The news I do read is now reminding me over and over of Berlin Diary, The Nightmare Years, The Rise & Fall of the Third Reich, & 20th Century Journey.
    You have to ask yourself if he would have had a job to get him going. He was open about the importance of The Life of The Mind, something you really care for when the physical life is not so fun anymore.

  26. fs

    An excellent insight, Pelham. However, I would say the editors and owners had a severe class bias and/or blinders on. Manufactured bullshit, if I remember–but I don’t really need to remember. Anytime I pick-up corporate print media, it’s like reading 1975-1999 with the same said biases.

  27. Markus

    In this area, population about 275,000, and remote from the nearest major metro which is Portland to the north a couple hundred miles, the local paper was 25 cents when I moved here in 2005. A subscription was about 17 bucks for 2 months. I found my first apartment here in that paper.

    Now the paper is $1.50 and a subscription is $77 13 weeks. All told about a 600% increase in little more than 10 years time, which works out to 60% per year. A little less since that does not calculate compounding, but the point is that newspapers have absolutely skyrocketed faster than education costs, or even healthcare inflation. For a business model that gave end users a steep discount to production costs because advertisers paid the majority of the overhead this is a disaster. The increased price was not absorbed by consumers meaning the advertisers had to pick up the slack, and the result was entirely predictable.

    Total circulation is now under 25,000, less than 40% of when I moved here. For my part I have not paid for one since they were 50 cents. I do pick one up at the car wash or in restaurants when others leave them behind though, and it has been YEARS since I saw an ad for a house or apartment, the classified section basically only advertises legal notices that are required to be publically published. If you are looking for a rental your only real choice is Craigslist.

    I console myself that it was just a right wing rag anyway, and most days it appears to be about a dollar a page. But, I do miss holding and reading real stuff.

    I am so tired of advertising in general, and TV drug ads in particular as revolting and disgusting as they are, yep I want to hear all about your irritable bowels and vaginal itching and limp penises with your horny bimbo wife doing a soft core porn imitation of Debbie Does Dallas while I eat supper watching the news. I no longer allow ads in my house of any type. When they come on I change channels, or turn the TV off. I still watch PBS but even that is getting commercialized and it is just a matter of time before Madison Avenue greed gets to them too.

    Check out Big Bang Theory as an example, for years it was slow to catch on, then suddenly it became so popular the ads took the show over. Last time I watched a new episode I am pretty sure there was less than 13 minutes of content and all the rest obnoxious ads. And it is that way with everything advertising touches, the industry knows no limits. They also still work on the marketing theory that if it annoys you it will work better because positive or negative sentiment does not matter as much as actually remembering the product or business that bought the ad.

    THEY ARE WRONG! You can so annoy people that they go out of their way not to pay for the sponsors goods or services. I know I do. And I try to patronize businesses that run classy or entertaining ads. Of course we do not always have much choice, Charter Cable is an example, extremely annoying ads rapping about why I should buy Charter Spectrum, well they are a monopoly, I have no choice, it is them or nothing. If I did have a choice I would switch today just because I find their ads so damned disturbing.

    Ads are ruining the net, scripts run forever and slow your computer so banners and unwanted videos can take over your machine. When this happens it is ALT+CTL+DEL and END TASK! I will not bookmark a site where they believe I should be forced to consume their ads. I am even seriously considering moving to Belize just so I am not forced to sit and get advertised to. My mailbox is full of litter every day. My TV and internet being destroyed, now even my cell phone getting junk robotic advert calls, if that last keep us I will terminate the phone service and just keep the iPhone as a camera. The cable bundle includes a phone line and unit but those have been so overrun with junk marketing calls that I never plugged it in. I do not even know the phone number of my landline phone because I have no use for the annoying calls in my life.

    That is how bad it is getting. So, newspapers today, net, phone, tomorrow. There is nothing the ad business will not do to make billions and we get to pay for it all which is what really hurts. TV gets ad revenue AND cable subscription payments. Newspapers get ad revenue AND customer subscription payments. There just is not enough money in the world for these people. And if you think that is where it ends you are wrong. They will not be happy till you can be subjected to unwanted ads directly imported into your brain with no ability for you to disconnect. Science fiction10 years ago, science is close to discovering a way to do it. I do hope that is classified as one of the circumstances upon which self inflicted doctor assisted euthanasia is approved for.

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