The Impact of Aggregators on Internet News Consumption

37 Pages Posted: 13 Jan 2017

See all articles by Susan Athey

Susan Athey

Stanford Graduate School of Business

Markus M. Mobius

University of Michigan at Ann Arbor - School of Information; Microsoft Corporation - Microsoft Research New England; National Bureau of Economic Research (NBER)

Jenő Pál

Central European University (CEU) - Department of Economics

Date Written: January 11, 2017

Abstract

A policy debate centers around the question whether news aggregators such as Google News decrease or increase traffic to online news sites. One side of the debate, typically espoused by publishers, views aggregators as substitutes for traditional news consumption because aggregators’ landing pages provide snippets of news stories and therefore reduce the incentive to click on the linked articles. Defendants of aggregators, on the other hand, view aggregators as complements because they make it easier to discover news and therefore drive traffic to publishers. This debate has received particular attention in the European Union where two countries, Germany and Spain, enacted copyright reforms that allow newspapers to charge aggregators for linking to news snippets. In this paper, we use Spain as a natural experiment because Google News shut down all together in response to the reform in December 2014. We compare the news consumption of a large number of Google News users with a synthetic control group of similar non-Google News users. We find that the shutdown of Google News reduces overall news consumption by about 20% for treatment users, and it reduces page views on publishers other than Google News by 10%. This decrease is concentrated around small publishers while large publishers do not see significant changes in their overall traffic. We further find that when Google News shuts down, its users are able to replace some but not all of the types of news they previously read. Post-shutdown, they read less breaking news, hard news, and news that is not well covered on their favorite news publishers. These news categories explain most of the overall reduction in news consumption, and shed light on the mechanisms through which aggregators interact with traditional publishers.

Keywords: News Consumption, Aggregators, Google News, Complements, Substitutes

JEL Classification: D12

Suggested Citation

Carleton Athey, Susan and Mobius, Markus M. and Pál, Jenő, The Impact of Aggregators on Internet News Consumption (January 11, 2017). Stanford University Graduate School of Business Research Paper No. 17-8. Available at SSRN: https://ssrn.com/abstract=2897960

Susan Carleton Athey

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Markus M. Mobius (Contact Author)

University of Michigan at Ann Arbor - School of Information ( email )

304 West Hall
550 East University
Ann Arbor, MI 48109-1092
United States

HOME PAGE: http://www.markusmobius.org

Microsoft Corporation - Microsoft Research New England ( email )

One Memorial Drive, 14th Floor
Cambridge, MA 02142
United States

HOME PAGE: http://www.markusmobius.org

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.markusmobius.org

Jenő Pál

Central European University (CEU) - Department of Economics ( email )

Nador u. 9.
Budapest H-1051
Hungary

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