Paywalls and the Demand for Online News

42 Pages Posted: 9 Apr 2019

See all articles by Frode Steen

Frode Steen

Norwegian School of Economics (NHH) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2019

Abstract

The digitisation of society has posed a challenge to news outlets. Seeking advertising revenues and facing competition for the attention of their readers, many news outlets entered the digital era with unrestricted access to their online content. More recently, news outlets have sought to restrict the amount of content available for free. We quantify the impact of introducing a paywall on the demand for news in Norway. The short-run average impact of a paywall is negative and between 3 and 4%, in the long run the effect increases to between 9 and 11%. We find heterogeneity in the response to paywalls. The largest news outlet within its market experiences larger effects than the other news outlets. After introducing a paywall, the largest news outlets face a long-run reduction in demand between 13 and 15%, as compared to the others who experience a decrease of between 8 and 11%. The timing of introducing a paywall does not seem to affect the demand response very much.

Keywords: business models, Online news, paywalls, two-sided markets

JEL Classification: D40, L20, L82

Suggested Citation

Steen, Frode, Paywalls and the Demand for Online News (April 2019). CEPR Discussion Paper No. DP13651. Available at SSRN: https://ssrn.com/abstract=3368148

Frode Steen (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 55 959 259 (Phone)
+47 55 959 543 (Fax)

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