Handbook of Media Economics, vol 1A

Reliance on advertiser finance also allows advertisers’ potentially different valuation

of audience demographic to influence the mix of available programming. See

Napoli

(2002, 2003)

.

1.2.5 Change in Costs over Time

Because of technological change—mostly due to digitization—fixed costs have been

shrinking in relation to market size for many media products. Moreover, marginal costs

for physical media products such as newspapers and magazines have fallen to zero. Fixed

costs for media products fall in relation to market size, in turn, for two reasons. First, fixed

costs may fall absolutely, as when new digital technology makes it less expensive to pro-

duce and publish a text product. A newspaper or magazine does not, in principle, need

printing or distribution ...