The Becker Posner Blog: Are Newspapers Doomed?

The Becker Posner Blog: Are Newspapers Doomed?

Posner

A newspaper is a bundled product. A bundled product is one that combines a number of products the demands for which may be quite different–some consumers may want some of the products in the bundle, other consumers may want other products in the bundle. (Another good example is the Windows operating system, a bundle of a number of different programs.) Bundling is efficient if the cost to the consumer of the bundled products that he doesn’t want is less than the cost saving from bundling. A particular newspaper reader might want just the sports section and the classified ads, but if for example delivery costs are high, the price of separate sports and classified-ad “newspapers” might exceed that of a newspaper that contained both those and other sections as well, even though this reader was not interested in the other sections.