The Impact of Intermedia and Newspaper Competition on Advertising Linage in Daily Newspapers

By Shaver, Mary Alice; Lacy, Stephen | Journalism and Mass Communication Quarterly, Winter 1999 | Go to article overview

The Impact of Intermedia and Newspaper Competition on Advertising Linage in Daily Newspapers


Shaver, Mary Alice, Lacy, Stephen, Journalism and Mass Communication Quarterly


This exploratory study of forty dailies found a negative relationship between the number of radio and television stations and daily newspaper ROP advertising. A weaker relationship was found between number of radio and television stations and total advertising linage in daily newspapers. The markets used here varied greatly in competition's impact on Image. It appears intermedia advertising is monopolistically competitive with some media being better at some types of advertising than others. These results hold implications for antitrust actions because the growth in newspaper clusters is based on the assumption that intermedia competition is extensive in newspaper markets.

A truism of the media industry is that newspapers face increasingly complex and competitive markets for advertising.l The growth of other media during the past few decades has been remarkable. The number of radio stations in the United States almost doubled between 1970 and 1996,2 and the number of television stations increased from 872 in 19703 to 1,576 in 1998.4 Daily newspapers' share of total advertising revenues declined from 26.4 percent in 1986 to 22.5 percent only ten years later.5 As the number of media outlets increases, there is a potential for advertising in a greater number of outlets and a greater diversity of media. However, the degree and nature of intermedia advertising competition's impact on newspapers remain unclear. On the one hand, newspaper managers argue they face an extremely competitive advertising market where they fight with other media to survive.6 Media economics scholars, on the other hand, maintain that the print and electronic media are not good substitutes for all types of advertising.7

The nature of intermedia competition with newspapers has gained importance as the newspaper industry becomes more concentrated. The 1990s has seen an increase in groups buying independent newspapers and other groups.8 One force behind this concentration process is the practice of clustering, a business strategy in which a group buys several newspapers in close proximity.9 Clustering allows a group to share printing and distribution costs and to provide regional advertising. Although clustering makes good business sense, there is some evidence that it can reduce competition for readers,lo which in turn can affect newsrooms budgets" and news coverage.12

However, the potential impact of group clustering on regional competition has led to little action by the Justice Department with one exception.13 Observers have suggested that the lack of antitrust activity reflects the recognition that newspapers compete with a variety of media for advertising.14 However, this assumption has received little empirical testing. This study examines this assumption and the nature and degree of intermedia competition for newspapers by using a convenience sample of forty daily newspapers. More specifically, it explores the connection between the availability of other media outlets in a county and number of advertising lines in the daily newspapers.

Theoretical Background

Competition occurs among products when buyers are willing to substitute these products for each other.15 A standard way of defining the degree of substitutability is price cross-elasticity of demand, which is the change in demand for a product when the price of a substitute changes.16 The greater the change (elasticity), the better substitutes the products are for each other. Of course, demand also can be elastic with respect to other variables, such as quality.17

The degree of substitutability reflects the similarity of products. In perfect competition markets, products are homogeneous and, therefore, perfect substitutes. However, in monopolistic competitive markets, products are heterogeneous to varying degrees and substitutability varies.18 Monopolistic competition was developed as a reaction to the limitations of monopoly and perfect competition theories because most markets do not fit the assumptions of these types of theories. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Impact of Intermedia and Newspaper Competition on Advertising Linage in Daily Newspapers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.