Figure competiton dating
On the one hand, as highlighted by Hamilton (2004: 21), “‘more news is better news’ appears to be an axiom favoured in discussions about the news marketplace”.
Among the many benefits of competition, ideological diversity is central (Gentzkow et al. On the other hand, however, the media industry is characterised by high fixed costs and increasing returns to scale.
Of course, in reality, citizens have different tastes and entrants generate their own market shares. In other words, increased media competition leads to business stealing.
counties where consumers have similar preferences). Moreover, this decrease in the number of journalists is not compensated by an overall increase in the aggregate number of journalists working at the news-market level, as illustrated in Figure 3. In my paper, I provide anecdotal evidence of a ‘switching effect’, with a number of journalists working for the incumbent newspaper's newsroom switching to the entrant's one.
The Federal Communications Commission (FCC) just repealed restrictions on local media ownership that have been in place in the US for 42 years, opening the door to more consolidation in the media sector.
Understanding the effects of media competition on how well informed citizens are is thus more important than ever.
It also has a negative impact on local election turnout.
While competition is key to the quality of the media environment, the results highlight that more media competition is not necessarily socially efficient.