de Cornière, Alexandre and Sarvary, Miklos (2021) Social Media and News: Content Bundling and news Quality. TSE Working Paper, n. 20-1152, Toulouse

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Abstract

The growing influence of internet platforms acting as content aggregators is one of the most important challenges facing the media industry. We develop a simple model to understand the impact of third-party content bundling by a social platform that has a monopoly on showing user-generated content to consumers. In our model consumers can access news either directly through a newspaper’s website, or indirectly through a platform, which also offers social content. We show that content bundling, when unilaterally implemented by the platform, tends to harm publishers and to increase the dispersion of quality across outlets. News quality is more likely to increase with content bundling when the cost of providing quality is low, and when competition among publishers is strong. When content bundling follows an agreement between the platform and publisher, its effects are reversed, as publishers’ profits go up while quality dispersion goes down. In a setup with heterogeneous consumers, we also show that the platform’s ability to personalize the mix of content it shows to users induces publishers to invest more in the quality of their content.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2021
Place of Publication: Toulouse
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse Capitole
Site: UT1
Date Deposited: 06 Oct 2020 07:32
Last Modified: 02 Feb 2022 12:58
OAI Identifier: oai:tse-fr.eu:124772
URI: https://publications.ut-capitole.fr/id/eprint/41835

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