Concentration and Self-Censorship in Commercial Media

41 Pages Posted: 19 Jan 2016

See all articles by Fabrizio Germano

Fabrizio Germano

Universitat Pompeu Fabra - Department of Economics and Business

Martin Meier

Institute for Advanced Studies (IHS) - Department of Economics & Finance

Date Written: July 18, 2012

Abstract

Given that over half the revenues of global newspaper publishing come from advertising (80% in the US and 57% in OECD countries, OECD, 2010), we study how media firms internalize the effect of their own coverage on advertisers' sales and hence on their own advertising revenues. We show, within a framework of non-localized, Hotelling-type competition among arbitrary numbers of media firms and outlets, that (i) topics sensitive to advertisers can be underreported by all outlets in the market, (ii) underreporting tends to increase with the concentration of ownership, (iii) adding outlets, while keeping the number of owners fixed, can further increase the bias. We argue that self-censorship can potentially cover a wide range of topics and generate empirically large externalities.

Keywords: Media economics; media consolidation; media markets; advertising and commercial media bias

JEL Classification: L13, L82

Suggested Citation

Germano, Fabrizio and Meier, Martin, Concentration and Self-Censorship in Commercial Media (July 18, 2012). Available at SSRN: https://ssrn.com/abstract=2717785 or http://dx.doi.org/10.2139/ssrn.2717785

Fabrizio Germano (Contact Author)

Universitat Pompeu Fabra - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
+34-93-542-2729 (Phone)
+34-93-542-1746 (Fax)

Martin Meier

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

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