The newspaper publishing industry in Europe is undergoing a transition and is confronted with serious challenges from the increasing role of the Internet and the hereto-related changes in media consumption habits. Europe is a region, where Internet usage not only has been on a relatively high level but also increased substantially with likely effects on newspaper publishing. This article analyses the development and determinants of the profitability of newspaper publishing sectors of 12 European markets. The average profitability of newspaper publishing is shown to vary both across countries and over time. The results from the econometric estimation prove the assertion that the price–cost margins can not only be explained by the increasing uptake of Internet but also by factors reflecting scale economies and the degree of the competitive pressure.