Internet and Old Media: Substitutes or Complements?

Time spent on the Internet was assumed to crowd out time spent on old media like newspapers and T.V. and to a large extent that's true.

But it can also be a complement, increasing the value of existing media. For instance, the NY Times as an article describing how Twitter and Facebook have helped drive record TV ratings for the Vancouver Olympics.

"The Internet is our friend, not our enemy,” said Leslie Moonves, chief executive of theCBS Corporation, .... “People want to be attached to each other.”

In research that Jeffrey Hu, Duncan Simester and I did, we also found that their could be significant complementarities across different channels, e.g. Internet & catalog sales. In a controlled field experiment, most customers responded to increased catalog mailings by also increasing their purchases via the company's Internet channel. Interestingly, the effect was reversed for the very "best" customers. They were already saturated with information from the company and additional communications actually had a negative effect on profits.

A Spear-Carrier for the Future of Media?

(Posted by Jennifer Fremont-Smith)

This is my day job now. ...The 300 or so subscribers who support this operation (renewal rates are always a little bit uncertain) should feel that they are part of a very interesting evolution in the news business.

... little start-ups – Dyson’s, Tufte’s, Lipsky’s, Stoll’s, Sennott’s, mine – may be more indicative of the possibilities for a new kind of journalism on the Web, perhaps even more durable in the end.

That's David Warsh's latest column. More here.

New Media Demands a New Kind of Media Company

(Posted by Yael Caspi-Scwartzberg)

This article seems relevant to our class discussions since it discusses the economics of the online media vs. the traditional media businesses, including barriers to entry, economies of scope and possible business models.