Effects of journalism awards as quality signals on demand

Abstract

This article examines the question whether journalism awards can serve as quality signals and increase the demand for quality journalism. Information asymmetries between suppliers (journalists) and consumers (reader, viewers, users) can lead to inefficiently low demand for high-quality journalistic products, since consumers are unable to verify the product’s quality before consumption (ex ante). This problem can be addressed by providing customers with quality signals. We test the hypothesis that journalism awards can serve as quality signals by analyzing the signaling power of the German Grimme Prize in the category ‘Information and Culture’. A quantitative difference-in-differences approach is used to discover differences in the audience development of 109 nominees and winners. Results show that winning the Grimme Prize has a small positive effect on audience reach with respect to the total audience. Nevertheless, no effect on broadcasts’ market shares is discernable. Considering different audience groups, winning the award particularly seems to attract those consumers who are expected to have lesser experience with journalistic broadcasts.