Economic Analysis of the Great Success of Free Newspapers

Seminar paper from the year 2008 in the subject Economics - Micro-economics, grade: 1, University of Westminster (Westminster Business School), language: English, abstract: Free content is supplied for example by internet, TV and a free newspaper. An increasing use of internet is a crucial factor of long term success, as it implies a higher supply of free media content. This enlarges the demand for free content, in other words it reduces the willingness to pay for content like information and entertainment. This is a big chance for publishers of free newspapers. The free newspapers mainly appeal to a young target group. Therefore it is very important for the long term success that the society is not running out of this target group. Many European countries have the problem of an ageing society. This is why the publishers have to be aware of the demographic development constantly and should always try to locate agglomeration areas of their target group. Agglomeration areas have another crucial impact on the long term success. To be attractive for the advertisement space demanders (who are the source of revenue for the free newspaper publisher) it is most important to have a very high circulation of the newspaper.