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Content Provision in the Media Market with Single-Homing and Multi-Homing Consumers

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  • Garcia Pires Armando J.

    (Centre for Applied Research at NHH (SNF), Helleveien 30, 5045 Bergen, Norway)

Abstract

In this paper, we analyze the effects on content provision in the news market of single-homing (i.e. when readers consume news from just one outlet) and multi-homing (i.e. when readers can choose to consume news from competing outlets). Media firms compete on content provision and on advertising revenues. Readers have an ideal variety of content and experience a disutility from consuming news that differs from their ideal variety. In addition, readers have a preference for single-homing and for multi-homing. In this set-up, we show that media firms only diversify content with single-homing, but not with multi-homing. The reason for this is that competition for readers and advertising is lower under multi-homing than under single-homing, since multi-homing readers consume from all media outlets. We derive the consequences of single-homing and multi-homing for profits, consumer surplus and social welfare. We also discuss the implications of our results for the current debate in the media market related with social media and echo chambers.

Suggested Citation

  • Garcia Pires Armando J., 2020. "Content Provision in the Media Market with Single-Homing and Multi-Homing Consumers," Review of Network Economics, De Gruyter, vol. 19(1), pages 43-83, March.
    • Handle: RePEc:bpj:rneart:v:19:y:2020:i:1:p:43-83:n:1
    DOI: 10.1515/rne-2020-0021
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    More about this item

    Keywords

    social media; echo chambers; content provision; two-sided markets; multi-homing;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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