Content Aggregation by Platforms: The Case of the News Media

The digitization of content has led to the emergence of platforms that draw information from multiple sources. Policymakers are concerned that these new platforms threaten incentives for the production of original content. As a result, policymakers are contemplating regulations that would force aggregation platforms to pay or require an explicit “opt-in” for content providers. To understand the possible consequences and underlying rationale of such laws, we explore whether aggregation of content by a single platform encourages users to “skim” content or to investigate in depth. We study a contract dispute that led a major aggregator to remove information from a major content provider. We find that after the removal, users were less likely to investigate additional, related content in depth, particularly sources that were horizontally or vertically differentiated. JEL classification: L86 keywords: digitization, information, consumer search, Internet ∗Economics Department, Occidental College, CA †MIT Sloan School of Management, MIT, Cambridge, MA and National Bureau of Economic Research. ‡Earlier versions of this paper were circulated under the titles “Copyright, Digitization, and Aggregation” and “News and Online Aggregators.” We thank Robert Seamans for useful comments. We thank Christopher Hafer of Experian Hitwise. We also thank Shreya Bhaskaran, Cassandra Crosby, Sara Mcknight, and Anthony Quach for excellent research assistance. Financial support from the NBER Innovation Policy Group and NET Institute (www.NETinst.org) is gratefully acknowledged.