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Google Confidential and Proprietary
1
Newspaper economics
Online and offline
Hal VarianMarch 9, 2010
 
Economics of newspapers
•
Review some of the economic facts about newspapers
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Revenues and costs
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Advertising level, change and composition
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Examine how internet has impacted ad revenue
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Examine how internet has impacted reader use patterns
•
Speculate about what might turn things around
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Business opportunities
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Technological opportunities
•
Data sources
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US Statistical Abstract
 – 
Newspaper Association of America Trends and Numbers website
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Pew Foundation
 – 
Academic books and publications
 
Revenue and costs
Advertising80Retail40%Classified32%National 8%Sales20Newsstand17%Subscription 3%Total100%100Core35%Promotion12%Editorial14%Administrative 9%Prodn & Distn52%Production20%Distribution14%Raw materials18%Total87%87%
Source: Vogel, H, Entertainment Industry Economics, 7th edition, page 343
Revenue (%)Costs as % of revenueInternet distributioncould cut productioncosts by at least half.
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