The USA newspaper industry: Boom and bust of the economic model

Abstract

The technological and behavioural changes emerging in the last decade due to the birth of digital journalism have caused a profound change in traditional news organisations. The most notable effects have been, above all, the break in the upward trend in daily newspaper circulation, investment in print advertising and daily spending on newspapers. In contrast, we observed a continuous increase in digital advertising investment in correlation to the growth of its readership. Despite the importance of studying the effects of digital media on print media and analysing its long-term trends, there is a notable lack of rigorous research establishing a reliable empirical foundation. This article aims to determine the evolution, trends and relationships of different variables (total expenditure, circulation, investment in advertising, etc.) of print media in the United States over the last 60 years. It also analyses the effects of digital media on print media over the past 10 years and compares the evolution of print circulation of series from two time periods: one built up during the last 60 years and the other, during the last 10. The main conclusions drawn from the empirical analysis point that the spending on print media positively affects its advertising investment, and establishes a significant negative correlation between spending on print media and investment in print advertising, and a high negative correlation between printed and digital advertising investment.