Working Paper: CEPR ID: DP14494
Authors: Charles Angelucci; Julia Cag; Michael Sinkinson
Abstract: Technological innovations in content delivery, such as the advent of broadcast television or of the Internet, threaten local newspapers’ ability to bundle their original local content with third-party content such as wire national news. We examine how the entry of television – with its initial focus on national news – affected local newspapers as well as consumer news diets in the United States. We develop a model of local media and show that entry of national television news could reduce the provision of local news. We construct a novel dataset of U.S. newspapers’ economic performance and content choices from 1944 to 1964 and exploit quasi-random variation in the rollout of television to show that this new technology was a negative shock in both the readership and advertising markets for newspapers. Newspapers responded by providing less content, particularly local news. We tie this change towards increasingly nationalized news diets to a decrease in split-ticket voting across Congressional and Presidential elections.
Keywords: media; local news; television; newspapers; advertising; bundling; split-ticket voting
JEL Codes: D4; D7; L11; L15; M37; N72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Television entry (Y20) | Decrease in readership of local newspapers (R23) |
| Television entry (Y20) | Decrease in advertising markets for local newspapers (M38) |
| Television entry (Y20) | Decrease in newspaper advertising rates (M38) |
| Television entry (Y20) | Decrease in national advertising quantity for evening newspapers (M37) |
| Television entry (Y20) | Decrease in total number of stories published by newspapers (A19) |
| Television entry (Y20) | Decrease in original local news stories published by newspapers (H74) |
| Television entry (Y20) | Less split-ticket voting in congressional elections (D72) |