Effect of Paywall Introduction on Newspaper Companies' RevenuesNewspaperTotal revenue change ($ in thousands)Percentage change (%)Newspaper sizeLos An...
GMAT Information and Ideas : (Ideas) Questions
Effect of Paywall Introduction on Newspaper Companies' Revenues
| Newspaper | Total revenue change ($ in thousands) | Percentage change (%) | Newspaper size |
|---|---|---|---|
| Los Angeles Times | 93,966 | 12.5 | large |
| The New York Times | 235,788 | 20 | large |
| The Denver Post | -3,765 | -1 | small |
| Sun Sentinel | -24,899 | -11.9 | small |
| Chicago Tribune | 94,492 | 19 | large |
Digital paywalls restrict access to online content to those with a paid subscription. In an investigation of the effect of paywalls on newspaper company revenues for print and digital subscriptions and advertising, Doug J. Chung and colleagues compared actual outcomes (with a paywall) to control estimates (without a paywall). The researchers concluded that introducing a paywall is generally more beneficial for larger newspapers, which have high circulation and tend to offer a substantial amount of unique online content.
Which choice best describes data from the table that support Chung and colleagues' conclusion?
The Chicago Tribune and the Los Angeles Times had similar total revenue changes, but the Los Angeles Times had a smaller percentage change.
The Los Angeles Times had a \(12.5\%\) revenue change, while the Chicago Tribune had a \(19\%\) revenue change.
The New York Times had a \(20\%\) revenue change, while the Denver Post had a \(-1\%\) revenue change.
The Denver Post had only a \(-1\%\) revenue change, which was the smallest percentage change of the selected companies.
Step 1: Decode and Map the Passage
Create Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| Table showing: Effect of Paywall Introduction on Newspaper Companies' Revenues |
|
| Los Angeles Times: 93,966 (thousands), 12.5%, large |
|
| The New York Times: 235,788 (thousands), 20%, large |
|
| The Denver Post: -3,765 (thousands), -1%, small |
|
| Sun Sentinel: -24,899 (thousands), -11.9%, small |
|
| Chicago Tribune: 94,492 (thousands), 19%, large |
|
Provide Passage Architecture & Core Elements
Main Point: Research shows that digital paywalls generally benefit larger newspapers more than smaller ones, with data showing positive revenue changes for large papers and negative changes for small papers.
Step 2: Interpret the Question Precisely
What's being asked? The question asks which data from the table supports the researchers' conclusion that paywalls are more beneficial for larger newspapers.
What type of answer do we need? We need specific data comparison that demonstrates this size-based difference.
Any limiting keywords? None specified.
Step 3: Prethink the Answer
- The right answer should compare a large newspaper's positive performance with a small newspaper's negative performance to show the size-based pattern that supports the conclusion.
The Chicago Tribune and the Los Angeles Times had similar total revenue changes, but the Los Angeles Times had a smaller percentage change.
✗ Incorrect
- Compares two large newspapers to each other, doesn't show the large vs. small newspaper pattern
The Los Angeles Times had a \(12.5\%\) revenue change, while the Chicago Tribune had a \(19\%\) revenue change.
✗ Incorrect
- Again compares two large newspapers, missing the key comparison between large and small newspapers
The New York Times had a \(20\%\) revenue change, while the Denver Post had a \(-1\%\) revenue change.
✓ Correct
- Compares The New York Times (large, +20%) with The Denver Post (small, -1%)
- This direct contrast perfectly supports that paywalls are generally more beneficial for larger newspapers
The Denver Post had only a \(-1\%\) revenue change, which was the smallest percentage change of the selected companies.
✗ Incorrect
- Only mentions The Denver Post's performance in isolation, doesn't provide the comparative data needed