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Essays on Newspaper Economics.

By Adithya B. Pattabhiramaiah

Abstract

This dissertation consists of two chapters that focus on estimating the economic impact of two major pricing changes witnessed recently in the U.S. newspaper industry. The first chapter investigates the optimality of the decision adopted by print newspaper publishers to increase subscription prices notwithstanding a declining preference among readers for newspaper consumption. Further, it proposes and evaluates theoretical explanations for the increasing subscription price trajectory in this market. Of the three available subscription options in print (Daily, Weekend and Sunday only), subscription prices increased more steeply for the Daily option; this is consistent with the view that newspapers are driving away low valuation Daily option readers but not Sunday, as Sunday contributes higher ad revenues. As an extreme case of this strategy, several newspapers have adopted a policy change by limiting production/distribution of the newspaper only to weekends. A counterfactual simulation shows the implications of such a policy change and offers implications for effective newspaper product portfolio management. Second, over the last few years, another popular strategy among newspaper publishers operating online editions is the creation of paywalls (i.e., the practice of charging online readers a subscription fee for accessing news content). News publishers' objectives from setting up paywalls are believed to be threefold: a) creating a new revenue stream by monetizing online news content in the reader market, b) preserving the more lucrative print subscription revenues by discouraging print readers from switching to free online newspapers, and c) increasing the newspaper's ability to charge higher ad rates by promoting a subscription base of paying readers. It is unclear whether charging readers for online access will unambiguously serve all the expected objectives especially since the paywalls run the risk of leading to heavy attrition of readers and hence, advertisers. The second chapter employs readership and advertising data for the New York Times, a newspaper that has been cited in the media for its successful paywall execution, to investigate the effects of its paywall launch on online readership, print circulation and online advertising revenues

Topics: Pricing, Two-sided Markets, Newspaper Industry, Newspaper Paywalls, Media Economics
Year: 2014
OAI identifier: oai:deepblue.lib.umich.edu:2027.42/109057

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