Trading Dollars for Dollars: The Price of Attention Online and Offline

Recent years have witnessed a crisis in journalism. Newspaper staffs have been cut by a third since 2000 (Pew Research Center 2013). Stock prices of major newspaper companies have fallen by more than half over the same period. The costly work of gathering, interpreting, and disseminating news—activities widely believed to have large positive political and social externalities (Downs 1957; Becker 1958)—seems not to pay the way it once did. The root cause, according to many accounts, is that the Internet has reduced the return news outlets can earn by selling the attention of their consumers to advertisers. This is held to be true both because the price of a given unit of attention is lower online than offline, and because the price of attention in traditional media has fallen as the Internet has made advertising markets increasingly competitive. The result is