Aggregators and the News Industry: Charging for Access to Content
AbstractThe Internet has drastically altered the nature of competition in the news industry. This article develops a model of price and quality competition between firms in the online news industry. In equilibrium, firms randomise in their pricing strategies and this generates the cross- sectional mixture of advertiser and subscription funded models we observe. The model also plausibly explains why pricing strategies differ across content areas. Finally, an important part of my explanation is that aggregators, such as Google and Digg.com, allow consumers to search amongst articles and direct consumers towards high quality articles. The model's results have implications for the ongoing public debate about the effects of aggregators on the news industry; although aggregators may harm firms, consumers may benefit.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 11-19.
Length: 33 pages
Date of creation: Sep 2011
Date of revision: Sep 2011
Contact details of provider:
Web page: http://www.NETinst.org/
Internet; Newspapers; Aggregators; Paywalls;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-CUL-2011-11-07 (Cultural Economics)
- NEP-ICT-2011-11-07 (Information & Communication Technologies)
- NEP-MKT-2011-11-07 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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