Multi-Homing and Platform Strategies: Historical Evidence from the US Newspaper Industry

45 Pages Posted: 6 Oct 2017 Last revised: 11 Jan 2019

See all articles by Kyeonggook Park

Kyeonggook Park

New York University (NYU) - Leonard N. Stern School of Business

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Feng Zhu

Harvard University - Harvard Business School

Date Written: December 1, 2018

Abstract

We examine how heterogeneity in customers’ multi-homing tendencies affects a platform’s response to new entrants in its market. We develop a formal model to generate empirical predictions and then test them leveraging a historical setting: TV broadcast station entry into local newspaper markets from 1945–1963. We show that after a TV station enters the newspaper market, newspaper firms with more multi-homing consumers had higher subscription prices, circulation, and ad rates. These results suggest that heterogeneity in customer multi-homing is a significant factor that can moderate platforms’ competitive strategies.

Keywords: multi-homing, platform strategies, competition, newspapers, television

Suggested Citation

Park, Kyeonggook and Seamans, Robert and Zhu, Feng, Multi-Homing and Platform Strategies: Historical Evidence from the US Newspaper Industry (December 1, 2018). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 18-032. Available at SSRN: https://ssrn.com/abstract=3048348 or http://dx.doi.org/10.2139/ssrn.3048348

Kyeonggook Park

New York University (NYU) - Leonard N. Stern School of Business ( email )

Suite 9-160
New York, NY
United States

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Feng Zhu (Contact Author)

Harvard University - Harvard Business School ( email )

Soldiers Field Road
Morgan 431
Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=14938

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