(How) Does UGC Impact Professionals? Evidence from Local News

43 Pages Posted: 27 Apr 2021

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Pedro Ferreira

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management; Carnegie Mellon University - Department of Engineering and Public Policy

Tom Grad

Copenhagen Business School - Department of Strategy and Innovation

Ananya Sen

Carnegie Mellon University

Date Written: April 26, 2021

Abstract

Today, many platforms host user-generated content (UGC) and content by professionals side by side. However, behavior of UGC and professionals is mostly studied in isolation. In this paper, we study the spillover effects from UGC on content from professionals in the context of the news industry. We use an exogenous shock to the supply of UGC to identify spillover effects on the output of professionals as well as the implications for the business model of online platforms. Using data from a network of 122 local news outlets hosted by an online news platform, we find that in response to the reduction in the supply of user-generated news, which mainly is driven by reduced output from experienced users, inexperienced professionals significantly increase their output. However, we find a decrease in overall content on the platform, one which is especially pronounced for local news. We further show that this likely has detrimental effects on the business model of the online platform, with a decrease in viewership and articles and an increase in the quantity of content by professionals, who are paid by the platform. Thus, our work contributes to the literature of UGC and online platforms, as well as the literature on local news.

Keywords: User generated content, Professionals, Platforms, Local News

JEL Classification: D26, D83, J2, L82

Suggested Citation

Claussen, Jörg and Ferreira, Pedro and Grad, Tom and Sen, Ananya, (How) Does UGC Impact Professionals? Evidence from Local News (April 26, 2021). Available at SSRN: https://ssrn.com/abstract=3834570 or http://dx.doi.org/10.2139/ssrn.3834570

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Pedro Ferreira

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

Carnegie Mellon University - Department of Engineering and Public Policy ( email )

Baker Hall 129
5000 Forbes Ave
Pittsburgh, PA 15213
United States

Tom Grad (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilenvej 14A
Fredericksberg, Copenhagen 2000
Denmark

Ananya Sen

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

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