The medium is global; the market is not: Exploring the geographic aspect of the online newspaper market

Thinking about the Internet as a news medium, this study is a scholarly endeavor which explores the geographic aspect of the online newspaper market from an economic perspective. A theory of online newspaper geography is developed, and an illustrative model proposed, from which inquiries about the nature of the new medium are made. A series of empirical studies provide valuable information which brought about a better understanding of online newspaper economics.; Technologically, the Internet's global nature enables online newspapers to seek markets at different geographic levels—(1) the local market within the print edition's circulation area, and (2) the long-distance market where the print edition is unavailable. An online newspaper's local market boundary is largely defined by its print counterpart. The size of the online market is positively related to print circulation. The long-distance market is at a higher geographic level, which often is subject to geographic proximity because news generally is not a universal product. In the local market, shovelware production increases product substitutability between the print and online editions and limits the growth of online readership because most people prefer the print format given the same content and the same price. In the long-distance market, the challenge is to find a substantial audience and to translate that audience into revenue streams. National online newspapers—with a larger market base and a higher percentage of nonprint users compared with local online newspapers—have gained much ground on the Web and have greater market potential in this online venture.; Therefore, geography is not irrelevant in cyberspace. Although the Internet is an inherently global medium, online newspapers still have market boundaries. This study emphasizes the importance of relevant market definitions and suggests online newspapers consider the economic implications involved with different geographic markets when developing market strategies.