Demand for Online News under Government Control

Anecdotal evidence suggests consumers navigate to news outlets that are government controlled (GC) and pro-government biased even in the presence of independent news outlets. Does this observation imply a demand for pro-government bias in the news? Or do consumers enjoy other aspects of GC news outlets such as quality and coverage of unbiased stories? To answer these questions, we examine consumers' demand in the Russian online news market. We use publication records of the top 48 online news outlets to characterize the methods of government control in the news and identify the news that is sensitive for the government. We then use temporal variation in the amount of sensitive news and click-level browsing panel data to estimate the demand for news. We find the average consumer prefers news with less pro-government bias, but substantial heterogeneity exists across consumers. In particular, preferences of frequent news consumers differ from the rest of consumers. In a counterfactual simulation, we show that GC news outlets would have higher market shares in the absence of control.