Free DP Download 11 April 2019: Paywalls and the Demand for Online News
CEPR DP No. 13651 | 4 April 2019
A new CEPR study quantifies the impact of introducing a paywall on the demand for news in Norway. The research finds that the short-run average impact of a paywall is negative and between 3 and 4%. In the long run, the negative effect increases to between 9 and 11%.
Competition policy expert Frode Steen notes that many news outlets entered the digital era with unrestricted access to their online content, seeking advertising revenues and facing competition for the attention of their readers. More recently, they have sought to restrict the amount of content available for free.
His analysis of the Norwegian media market finds that the largest news outlet experienced larger effects than other news outlets. After introducing a paywall, the largest news outlets face a long-run reduction in demand of between 13 and 15%, as compared with the others, which experience a decrease of between 8 and 11%. The timing of introducing a paywall does not seem to affect the demand response.
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