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Paywalls and the demand for online news

Author

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  • Skjeret, Frode

    (SNF)

  • Steen, Frode

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Wyndham, Timothy G.A.

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

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

  • Skjeret, Frode & Steen, Frode & Wyndham, Timothy G.A., 2019. "Paywalls and the demand for online news," Discussion Paper Series in Economics 7/2019, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2019_007
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    References listed on IDEAS

    as
    1. Chiou, Lesley & Tucker, Catherine, 2013. "Paywalls and the demand for news," Information Economics and Policy, Elsevier, vol. 25(2), pages 61-69.
    2. Ramon Casadesus-Masanell & Feng Zhu, 2010. "Strategies to Fight Ad-Sponsored Rivals," Management Science, INFORMS, vol. 56(9), pages 1484-1499, September.
    3. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, January.
    4. Mehmet Gümüş & Philip Kaminsky & Sameer Mathur, 2016. "The impact of product substitution and retail capacity on the timing and depth of price promotions: theory and evidence," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2108-2135, April.
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    Cited by:

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    4. Kim, Woojung & Wang, Xiaokun Cara, 2022. "The adoption of alternative delivery locations in New York City: Who and how far?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 158(C), pages 127-140.

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    More about this item

    Keywords

    Online news; paywalls; business models; two-sided markets;
    All these keywords.

    JEL classification:

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

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