We review and model the impact of the internet on the production and uptake of high-quality news. Our review of trends in the market for news suggests 3 stylized facts: i) particularquality news markets are dominated by merely a few providers, ii) demand for quality newsappears stable, but provision of news has become specialized; mainstream news is decoupledfrom quality news, and iii) the dominant business model of internet news mirrors that of radio,television, and newspapers in that costs of news production are recouped via advertising. Webuild a stylized model that rationalizes these facts. Our model captures three conflicting effects:(1) economies of scale in the production of news lead to monopolies on particular markets, (2)easy access to information on the internet makes it cheaper to provide high-quality news and todisseminate it via the web, which increases the production of such news; and (3) the existenceof bloggers and news aggregators who recycle the stories of news-providers reduces the effectiveproperty rights of high-quality news producers, thus forcing the business model of the internetto be advertising-based. For the most likely cases, our model would imply that the internet doesnot constitute bad news for the provision and uptake of quality news.
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