In recent decades, print media has suffered significant losses in readership as the internet has become the leading source of information for most people. To many observers, this suggests that the internet is ultimately responsible for the newspaper industry’s continuing struggles, but there is little causal evidence to support such claims.

In a paper in the American Economic Journal: Applied Economics, authors Manudeep Bhuller, Tarjei Havnes, Jeremy McCauley, and Magne Mogstad provide new evidence that illuminates the relationship between internet access and traditional print media. They show that internet adoption can trigger substantial reductions in print readership, but can lead to equally large increases in online news readership. However, despite this substitution, newspaper revenues can still fall dramatically.

Their findings are based on an analysis of detailed data from the Norwegian media market and the rollout of broadband internet. Figure 7 from the authors’ paper illustrates the impact of the internet on newspaper revenues in Norway from 2000 to 2010.

Figure 7 from Bhuller et. al (2024)

The chart shows actual newspaper revenues per Norwegian household (solid black lines) and predicted counterfactual revenues in the absence of broadband internet (dashed black lines). Revenues are in inflation-adjusted 2010 Norwegian kroner, which was roughly one sixth of a US dollar at the time.

The left panel depicts the actual and counterfactual total revenues for newspapers, along with the estimated losses stemming from lower sales (light gray) and decreased advertising revenue (dark gray). The right panel shows the actual and counterfactual sales revenues over the period, with the difference broken down into predicted losses from the quantity of newspapers sold (light gray) and the price of each copy sold (dark gray).

In the first two years of the period before broadband internet was widely available, revenues were roughly flat and there was little difference between the actual and counterfactual values. But around 2003, broadband access started to put a significant dent in newspaper revenues, as indicated by the divergence of the solid and dashed lines. By 2010, the internet had lowered newspaper sales revenues by slightly over 20 percent, with the drop in sales volume accounting for over 80 percent of the fall. 

Overall, the internet put significant pressure on print media’s business model in Norway. However, the authors also show that the newspaper industry was remarkably resilient against the large declines in revenues. The industry responded by adjusting across multiple margins, such as cutting costs by reducing labor inputs and changing the print product available to customers by reducing sheet size and changing newspaper content.