Handbook of Media Economics, vol 1A

both circulation and newspaper content. Rosse (1967) also finds important economies

of scale in both the circulation and advertising sides.

Reddaway (1963) provides evidence on the importance of fixed costs in the UK

newspaper industry, using detailed information on the cost structure of various papers,

including the differences between local and national papers, as well as between quality

and popular papers. Reddaway asks how it can be that the “quality” national papers

in Britain could compete with the “popular” papers, when the former had a tenth of

the circulation of the latter, as well as higher per-copy costs stemming from their larger

physical size. The answer, of course, lies in the greater ability of quality papers to charge

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