For magazines, the situation is not quite the same. While the two industries have
much in common, the greatest difference lies in market structure. Newspapers, especially
in North America, have traditionally operated in local markets, which is one reason why
the Internet has disrupted this business so much, by suddenly introducing competition
from around the country and the world. Magazines, by contrast, have always operated
on a national scale and have therefore not been affected severely by digital media. More-
over, magazines have always needed to find ways to differentiate themselves through
their choice of subject matter, in a way that newspapers have often not needed.
These differences perhaps explain the divergent fortunes of the newspaper and mag-
azine industries in recent years. While newspapers have experienced dramatic declines,
many countries have experienced a growth in the number of magazines in recent years.
Data in the US suggests that magazine circulation and advertising revenues have
remained relatively strong over the past two decades, as we will discuss in more detail
in
Section 9.2. Moreover, while a number of magazine titles have closed, there has also
been entry in recent years. As with newspapers, however, the advent of the Internet may
radically affect the physical form that magazines take, and it remains to be seen whether
digital advertising revenues can match those of print editions.
The rest of this chapter organizes the economic literature on print media according to
what we believe to be the most natural division of topics. In
Section 9.2, we provide an
overview of the print media industry, with an emphasis on the history of the newspaper
industry, particularly that of the United States. We present some stylized facts on the
industry and also discuss data sources for empirical researchers.
In
Section 9.3, we discuss market structure in print media, in particular—the number
of firms that the industry can support and the importance of economies of scale in this
industry. We discuss in detail the structure of newspaper markets in the United States, and
examine the reasons that the number of daily newspapers has fluctuated considerably over
time, rising rapidly from the mid-1800s until about 1920, and then declining steadily
since then.
In
Section 9.4, we discuss the economics of print media, especially in the context of
the recent and rapidly growing literature on two-sided markets. In fact, economists
working on the print media industry were confronted with the challenges of two-sided
markets—such as the estimation of multiple, interrelated demand models and cross-price
elasticities—well before the development of the current literature on two-sided markets
and its associated tools. We therefore first discuss an older literature on demand estima-
tion in newspapers and magazines, before surveying the more recent research in this area.
In
Section 9.5, we review the literature on advertising in newspapers and magazines.
Our focus in this section is on papers that examine the intermediary role of print media in
transmitting advertising messages to readers, as opposed to a more general analysis of the
literature on advertising, which is enormous. In particular, we review the research on
whether readers of print media value advertising positively or negatively, which has
400 Handbook of Media Economics