Digitization and Aggregation

The digitization of content has led to the growth of platforms that draw news and information from multiple sources. Policy makers are concerned that these new platforms threaten incentives for the production of original content. As a result, policymakers in Europe are contemplating regulations that would force such aggregators to pay each time they aggregate content. 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” or to investigate content in depth, and by extension whether users use aggregators to substitute or complement original content. We exploit a contract dispute that led a major aggregator to remove information from a content provider. We find that after the removal, users were less likely to investigate additional 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. ‡An earlier version of this paper was circulated under the title “News and Online Aggregators.” We thank Robert Seamans useful comments. We thank Christopher Hafer of Experian Hitwise. We also thank Cassandra Crosby and Sara Mcknight for excellent research assistance. Financial support from the NBER Innovation Policy Group and NET Institute (www.NETinst.org) is gratefully acknowledged.