Journalism in the Digital Age the Effect on Newspaper Quality of the Rise of Digital Platforms

This article presents a theoretical model of the strategic interaction between a newspaper and a digital platform. For a broad range of consumer preferences, entry by the digital platform causes the newspaper to reduce its readership, quality and advertising, and also to lose advertising revenue. The model may help to explain the observed falls in newspaper revenue and employment of journalists that have accompanied the rise of digital platforms. As journalism has public good characteristics, it is at risk of being undersupplied. We establish conditions under which, in our duopoly model, subsidies on readership and quality stimulate expenditure on journalism