Social Media and News: Content Bundling and News Quality

Alexandre de Cornière () and Miklos Sarvary ()
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Alexandre de Cornière: Toulouse School of Economics, Université Toulouse I Capitole, 31000 Toulouse, France
Miklos Sarvary: Columbia Business School, New York, New York 10027

Management Science, 2023, vol. 69, issue 1, 162-178

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, with initially high-quality outlets investing more and low-quality ones investing less. With many heterogenous newspapers, the result is robust even if each newspaper can prevent the platform from using its content. 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.

Keywords: social media; news quality; platform strategy; third-party content; content distribution (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:1:p:162-178

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