Competition in the News Industry: Fighting Aggregators with Versions and Links

Abstract

We analyze the linking and versioning strategies of a media firm when facing competition from blogs, search engines and news aggregators. First, we show that when the publisher competes against a blog it is less likely to release a “fighting version” if this generates significant spillovers for its rival. Second, we analyze in which situations a publisher will accept to offer part of its contents to a news aggregator in exchange for financial compensation. We explain that an agreement is possible when the aggregator is not overly dependent on the firm’s contents. Finally, we show that when the firm competes against a search engine, its linking and versioning strategies depend on the amount of traffic it receives from its competitor. The firm can use the search engine as its own low quality version and as a mechanism to expand its market since it gives access to many contents.