The Effects of Website Provision on the Demand for German Women's Magazines

Abstract

The effect of website provision on the demand for German women's magazines is analyzed using differentiated product demand models estimated on panel data that cover the period 1990 2000. Descriptive evidence on the magazines' website contents suggests that websites are used to provide supplementary information and to advertise the current print issue. Website provision does not significantly affect magazines' market shares. This result is robust with respect to the application of alternative econometric approaches to identify the demand model. A counter-factual analysis shows, however, that online magazines would loose around 0.3 per cent in market shares if they went back offline. Likewise, magazines that are currently offline may gain market shares of between 0.07 and 0.37 per cent if they launched a website. Interestingly, some of the potential winners' from going online actually launched a website in 2001.