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 afree 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 demandfor free content, in other words it reduces the willingness to pay for contentlike information and entertainment. This is a big chance for publishers offree newspapers.The free newspapers mainly appeal to a young target group. Therefore it is veryimportant for the long term success that the society is not running out of this targetgroup. Many European countries have the problem of an ageing society. Thisis why the publishers have to be aware of the demographic development constantlyand should always try to locate agglomeration areas of their target group.Agglomeration areas have another crucial impact on the long term success. To beattractive for the advertisement space demanders (who are the source of revenuefor the free newspaper publisher) it is most important to have a very high circulationof the newspaper.