Effect of Paywall Introduction on Newspaper Companies’ Revenues

Question

Newspaper Total revenue change ($ in thousands) Percentage change (%) Newspaper size
Los Angeles Times
\[93{,}966\]
\[12.5\] large
The New York Times
\[235{,}788\]
\[20\] large
The Denver Post
\[-3{,}765\]
\[-1\] small
Sun Sentinel
\[-24{,}899\]
\[-11.9\] small
Chicago Tribune
\[94{,}492\]
\[19\] large
Digital paywalls restrict access to online content to those with a paid subscription. In an investigation of the effect of paywalls on newspaper company revenues for print and digital subscriptions and advertising, Doug J. Chung and colleagues compared actual outcomes (with a paywall) to control estimates (without a paywall). The researchers concluded that introducing a paywall is generally more beneficial for larger newspapers, which have high circulation and tend to offer a substantial amount of unique online content.
Which choice best describes data from the table that support Chung and colleagues’ conclusion?
Choose 1 answer:
Choose 1 answer:
(Choice A) The Chicago Tribune and the Los Angeles Times had similar total revenue changes, but the Los Angeles Times had a smaller percentage change.
A
The Chicago Tribune and the Los Angeles Times had similar total revenue changes, but the Los Angeles Times had a smaller percentage change.
(Choice B) The Los Angeles Times had a 12.5% revenue change, while the Chicago Tribune had a 19% revenue change.
B
The Los Angeles Times had a 12.5% revenue change, while the Chicago Tribune had a 19% revenue change.
(Choice C) The New York Times had a 20% revenue change, while The Denver Post had a −1% revenue change.
C
The New York Times had a 20% revenue change, while The Denver Post had a −1% revenue change.
(Choice D) The Denver Post had only a −1% revenue change, which was the smallest percentage change of the selected companies.
D
The Denver Post had only a −1% revenue change, which was the smallest percentage change of the selected companies.

Answer 1

To determine which choice best supports the conclusion by Doug J. Chung and colleagues that introducing a paywall is generally more beneficial for larger newspapers, we need to focus on the differences in revenue changes and percentage changes between large and small newspapers.

1. Large Newspapers:

   • The New York Times: +$235,788 (20%)
   • Chicago Tribune: +$94,492 (19%)
   • Los Angeles Times: +$93,966 (12.5%)

2. Small Newspapers:

   • The Denver Post: -$3,765 (-1%)
   • Sun Sentinel: -$24,899 (-11.9%)

From the data, we can see that:

• Large newspapers mostly experienced positive revenue changes and significant percentage increases.
• Small newspapers, in contrast, had negative revenue changes or minor positive changes.

Now, let's analyze the choices:

• Choice A: States that The Chicago Tribune and the Los Angeles Times had similar total revenue changes but that Los Angeles Times had a smaller percentage change. This does not directly support the conclusion regarding larger newspapers receiving more benefit.

• Choice B: Mentions the percentage changes of the Los Angeles Times (12.5%) and Chicago Tribune (19%), which shows that both are performing well, but does not make a strong case for the generalization about large newspapers benefitting more from paywalls.

• Choice C: States that The New York Times had a positive revenue change (20%) compared to The Denver Post which had a negative change (-1%). This provides clear evidence of a large newspaper's better performance over a small newspaper.

• Choice D: Points out that The Denver Post had the smallest percentage change (-1%), which indicates a lack of benefit from a paywall, but does not highlight the success of large newspapers.

The best choice that supports the conclusion is:

Choice C: The New York Times had a 20% revenue change, while The Denver Post had a −1% revenue change.

This clearly illustrates the advantage larger newspapers have over smaller ones in terms of financial impact from paywalls.