Last Edition for Newspapers?

The recession and the internet are having a huge impact on the economics of traditional newspapers - no newspaper is immune and some of the world’s most famous titles such as the New York Times are making huge losses and facing closure.

A BBC online article a couple of weeks ago said that

“Newspapers and magazines have been badly hit by the economic downturn, with the collapse of the advertising market coming at the same time as declining circulation at most daily print publications.”

This video piece from BBC Worldwide is good on some of the problems facing the industry. As advertising migrates away from the print media towards the web, can the newspaper industry find a viable future?

The threats facing newspapers large and small represent a good case study in business economics

- What are the main fixed and variable costs for print newspapers?

- What is the marginal cost of supplying news to one more reader (i) through traditional means (ii) online

- Are these costs very different if newspapers migrate their content online?

- How are consumer preferences changing in the ‘market for news’?

- Think about your own preferences for getting news - how important are newspapers to you?

- Why is advertising revenue for newspaper falling?

- Do you feel that most consumers are now prepared to pay for getting their news online e.g. through a micro-payment system?