Time-Displacement and Efficiency

Perhaps the best way to articulate the changes in the news industry is to look at how news readership has changed over the past decade. As this chart from the Economist shows, newspapers and TV have undergone a slight decline in readership over the past decade while the Internet has dramatically spread as a source of news. However, the more important thing to observe from this chart is that the overall percentage of news sources used has increased. In 2001, the total percentage of TV, newspaper and Internet was around 135% while in 2008 it had increased to 145%. This observation brings up the two competing hypotheses regarding the internet’s effect on overall news readership.

The Time-Displacement Hypothesis is based on the idea that time is zero-sum. As Lars Willnat explains it, “Because there are only 24 hours in a day, time spent on one activity must be traded off against time spent on other activities.” On the other hand the Efficiency Hypothesis argues that the internet increases efficiency so users have more time for other activities, and that technologically advanced individuals tend to be able to multitask and fit more activities into less time. Thus the internet actually supplements news readership instead of reducing it.

A number of preliminary studies showed that increased time spent on the internet reduced a number of other activities including television viewing and face-to-face social interactions. Later studies have shown that the internet doesn’t actually impact daily activities, and that it has a positive impact on newspaper reading and radio news listening. Perhaps the most important aspect of these studies is how they control for different demographics. The original study supporting Time-Displacement had no controls unlike other studies supporting the Efficiency hypothesis.

Lars Willnat’s study used a number of controls on age, gender, ethnicity and income that were gleaned from earlier less extensive studies and he came to the conclusion that, “Internet news usage is not associated with the time spent using traditional news source,” and that, “Internet news usage does not compete with traditional news consumption in a zero-sum time scenario, as has been suggested by some earlier studies.”

Next: Revenue vs. Readership

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