An assistant professor at the Wharton School says paywalls may not be a viable strategy for every newspaper, and questions the survival of media organizations that cannot find alternative revenue sources.
Editor’s note: We spoke with Michael Sinkinson, an assistant professor of business economics and public policy at the Wharton School, about the repercussions of advertising sources moving from print to digital.
“Traditionally, the deal was you could support a newspaper by selling advertising. And it was very valuable for advertisers to reach readers of newspapers. Then consumers started reading the news online. And the reality was advertisers did not see the same value in placing ads in online formats. And that problem has not yet been solved by anyone that I’m aware of.
“So what we’ve seen is, some of the very high-end publications — The New York Times and The Wall Street Journal — have been able to put up paywalls. The reality is that might not be a viable strategy for every newspaper. So it’s unclear how the middle of the market, the lower end of the market, is going to survive if they can’t enforce the paywall on their content.”
Michael is an assistant professor of business economics and public policy at the Wharton School, specializing in applied microeconomics and industrial organization. His research focuses on questions of market structure as they relate to the industries of media, technology and telecommunications.