Paper #1256

Title:

Concentration and self-censorship in commercial media

Authors:

Fabrizio Germano and Martin Meier

Date:

December 2010

Abstract:

Within a simple model of non-localized, Hotelling-type competition among arbitrary numbers of media outlets we characterize quality and content of media under different ownership structures. Assuming advertising-sponsored, profit-maximizing outlets, we show that (i) topics sensitive to advertisers can be underreported (self-censored) by all outlets in the market, (ii) self-censorship increases with the concentration of ownership, (iii) adding outlets, while keeping the number of owners fixed, may even increase self-censorship; the latter result relies on consumers' most preferred outlets being potentially owned by the same media companies. We argue that externalities resulting from self-censorship could be empirically large.

Keywords:

Media economics; media consolidation; media markets; advertising and commercial media bias.

JEL codes:

L13; L82.

Area of Research:

Microeconomics

Published in:

Journal of Public Economics, Vol. 97, pp. 117-130, 2013

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