The Economic Fundamentals of Newspaper Publishing

Abstract

This passage refers to the cornerstone of newspaper economics: volume. Why is volume so important? Why are larger newspaper properties more profitable than smaller ones? How can small dailies still survive, despite their relative small scale, or can’t they? In this chapter I will try to answer these questions and explain some of the basic economics of newspaper publishing. Special attention is given to the meaning of the concept of volume, because through the history of the newspaper industry, the scene has been set by concentration of ownership and efforts to increase scale. Through the analysis of empirical data on cost and revenue structures, advertising market and circulation market development, advertising rates and subscription prices, the economics behind newspaper publishing in the Netherlands and the U.S.A. will be explained.

’Our economics depend almost completely on the ability to produce a very, very large mass distributed product, that’s fairly homogenous across the market. Although we serve different segments by including enough different information, the combination in a printed products needs to be produced in large quantities.’ (INT43.021195).