Author(s)
Susan Athey and Markus Mobius
Source
Working Paper No. 3353, 2012
Summary
This paper examines how the habits of news readers change when they can use an online news aggregator.
Policy Relevance
Local news outlets may see some benefit from online news aggregators like Google News, but may come to rely on these services for generating traffic to their sites. This may affect the future commercial viability of local news firms.
Main Points
- Newspaper advertising revenue fell by 57% between 2000 and 2009 in the United States, and subscriptions to newspapers fell by 18% over the same period. Today news is often consumed online.
- News aggregators, like Google News, index stories posted on news media web pages and serve summaries of these articles to consumers. Consumers may click on the summaries to read the article at the publisher’s web site.
- After viewing a summary, readers click through to the full article less than half the time. This means that readers consume news without contributing to the news medium’s advertising revenue.
- In 2009, Google News added a feature permitting French users to submit their location to Google. In return, Google News would serve story summaries from local news media.
- Local users who adopted this localization feature increased their consumption of local news by 26%. Most of this increase came through the use of Google News.
- These local users also read news from a wider variety of local news outlets, and increased the frequency of visits to the home pages of local news outlets by 10%.
- On the other hand, local users tended to substitute visits to the Google News page for visits to local news media home pages, suggesting that they increasingly turned to Google News for “curation” of news stories.