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Paywalls and the demand for online news

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  • Steen, Frode

Abstract

The digitisation of society has posed a challenge to news outlets. Seeking advertising revenues and facing competition for the attention of their readers, many news outlets entered the digital era with unrestricted access to their online content. More recently, news outlets have sought to restrict the amount of content available for free. We quantify the impact of introducing a paywall on the demand for news in Norway. The short-run average impact of a paywall is negative and between 3 and 4%, in the long run the effect increases to between 9 and 11%. We find heterogeneity in the response to paywalls. The largest news outlet within its market experiences larger effects than the other news outlets. After introducing a paywall, the largest news outlets face a long-run reduction in demand between 13 and 15%, as compared to the others who experience a decrease of between 8 and 11%. The timing of introducing a paywall does not seem to affect the demand response very much.

Suggested Citation

  • Steen, Frode, 2019. "Paywalls and the demand for online news," CEPR Discussion Papers 13651, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13651
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    References listed on IDEAS

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    1. Chiou, Lesley & Tucker, Catherine, 2013. "Paywalls and the demand for news," Information Economics and Policy, Elsevier, vol. 25(2), pages 61-69.
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    More about this item

    Keywords

    Online news; Paywalls; Business models; Two-sided markets;
    All these keywords.

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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