Will the Internet Destroy the News Media?

Susan Athey, Emilio Calvano & Joshua Gans February 2011

Wednesday, 18 May 2011

Wednesday, 18 May 2011

Wednesday, 18 May 2011

Wednesday, 18 May 2011

On the Internet, no one knows you’re a journalist.

Wednesday, 18 May 2011

Outline

Wednesday, 18 May 2011

Outline

Stylised facts

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories Main hypothesis

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories Main hypothesis Idealized ad market

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories Main hypothesis Idealized ad market Realistic ad market

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories Main hypothesis Idealized ad market Realistic ad market Positional advantage

Wednesday, 18 May 2011

Outline

Stylised facts Suggested theories Main hypothesis Idealized ad market Realistic ad market Positional advantage Conclusions

Wednesday, 18 May 2011

Stylised facts

Wednesday, 18 May 2011

The chart of doom

Newspaper  Ad  Revenue  ($m)

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

The chart of doom

Newspaper  Ad  Revenue  ($m)
$50,000

$37,500

$25,000

$12,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

The chart of doom

Newspaper  Ad  Revenue  ($m)
$50,000

$37,500

$25,000

$12,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

The chart of doom Newspaper  Ad  Revenue  (1980  $m)
$30,000

$22,500

$15,000

$7,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just the economy

Newspaper  Ad  Revenue  (%  of  GDP)
0.007

0.005

0.004

0.002

0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just circulation

Newspaper  Ad  Revenue  (1980  $m)

Daily  Circula0on  (‘000s)

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just circulation

Newspaper  Ad  Revenue  (1980  $m)
$30,000

Daily  Circula0on  (‘000s)
70,000

$22,500

62,500

$15,000

55,000

$7,500

47,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

40,000

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just circulation

Newspaper  Ad  Revenue  (1980  $m)
$30,000

Daily  Circula0on  (‘000s)
70,000

$22,500

62,500

$15,000

55,000

$7,500

47,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

40,000

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just circulation Newspaper  Ad  Revenue   (1980  $  per  paper  sold)
$1.40

$1.05

$0.70

$0.35

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just classifieds

Newspaper  Ad  Revenue  (1980  $m)

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just classifieds

Newspaper  Ad  Revenue  (1980  $m)
$30,000

$22,500

$15,000

$7,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just classifieds

Newspaper  Ad  Revenue  (1980  $m)
$30,000

$22,500

$15,000

$7,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Not just classifieds

Newspaper  Ad  Revenue  (1980  $m)
$30,000

$22,500

$15,000

$7,500

$0 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Source:  Newspaper  Associa0on  of  America Wednesday, 18 May 2011

Suggested theories to explain the decline

Wednesday, 18 May 2011

Ineffectiveness?

Wednesday, 18 May 2011

Ineffectiveness?

“Newspaper readers are ‘better’ than Web visitors. Online readers are a notoriously fickle bunch, and apparently are getting more so by the day. Web visitors barely stick around, yet they are counted in broad traffic statistics as if they were the same as the reader who lingers over his Sunday paper.”

(Paul Farhi, Washington Post)

Wednesday, 18 May 2011

Ineffectiveness?

Wednesday, 18 May 2011

Ineffectiveness?

Wednesday, 18 May 2011

Ineffectiveness?

Wednesday, 18 May 2011

Supply of ad inventory

Wednesday, 18 May 2011

Supply of ad inventory

... online ads sell at rates that are a fraction of those for print, for simple reasons of competition. “In a print world you had pretty much a limited amount of inventory — pages in a magazine,” says Domenic Venuto, managing director of the online marketing firm Razorfish. “In the online world, inventory has become infinite.” (from the NYT, May 2010)

Wednesday, 18 May 2011

Economic fundamentals

Wednesday, 18 May 2011

Economic fundamentals

Attention is still scarce ...

Wednesday, 18 May 2011

Economic fundamentals

Attention is still scarce ... and advertisers still want to access that attention.

Wednesday, 18 May 2011

Traditional business model

Wednesday, 18 May 2011

Traditional business model

Establish a platform

Wednesday, 18 May 2011

Traditional business model

Establish a platform

Wednesday, 18 May 2011

Traditional business model

If you build it they will come

Establish a platform

Wednesday, 18 May 2011

Traditional business model

$$

If you build it they will come

Establish a platform

Wednesday, 18 May 2011

Traditional business model

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

$$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

Competitive Bottleneck

$$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

Focus of investment and competition

Competitive Bottleneck

$$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

Focus of investment and competition

Competitive Bottleneck

$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

Focus of investment and competition

Waterbed Effect

Competitive Bottleneck

$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Wednesday, 18 May 2011

Traditional business model

Focus of investment and competition

Waterbed Effect

Competitive Bottleneck

$

$$

If you build it they will come

Establish a platform

Sell access to consumers

Each new reader brings a new revenue stream
Wednesday, 18 May 2011

Disruption

Wednesday, 18 May 2011

Disruption

The Internet has disrupted the traditional business model ...

Wednesday, 18 May 2011

Disruption

The Internet has disrupted the traditional business model ... need to wait for experiments to sort it out.

Wednesday, 18 May 2011

Experiments

Wednesday, 18 May 2011

Experiments

Paywall for premium content

Wednesday, 18 May 2011

Experiments

Paywall for premium content Paywall

Wednesday, 18 May 2011

Experiments

Paywall for premium content Paywall Limited paywall

Wednesday, 18 May 2011

Experiments

Paywall for premium content Paywall Limited paywall Free+online

Wednesday, 18 May 2011

Experiments

Paywall for premium content Paywall Limited paywall Free+online Free + offline only

Wednesday, 18 May 2011

Experiments

Paywall for premium content Paywall Limited paywall Free+online Free + offline only

Wednesday, 18 May 2011

Main hypothesis

Wednesday, 18 May 2011

Only two facts

Wednesday, 18 May 2011

Only two facts

The Internet has facilitated consumer switching between outlets

Wednesday, 18 May 2011

Only two facts

The Internet has facilitated consumer switching between outlets There is imperfect tracking between outlets

Wednesday, 18 May 2011

Switching

Wednesday, 18 May 2011

Switching

Browsing

Wednesday, 18 May 2011

Switching

Browsing Free content

Wednesday, 18 May 2011

Switching

Browsing Free content Aggregators, social networks and search

Wednesday, 18 May 2011

Switching

Browsing Free content Aggregators, social networks and search

Wednesday, 18 May 2011

Traditional Media Economics

$

$$

Wednesday, 18 May 2011

Traditional Media Economics

$

$$

Wednesday, 18 May 2011

Traditional Media Economics

$

$$

Wednesday, 18 May 2011

Traditional Media Economics

$

$$

Wednesday, 18 May 2011

Traditional Media Economics

$ or

$$

Wednesday, 18 May 2011

Traditional Media Economics

$ or

$$ and

Wednesday, 18 May 2011

Traditional Media Economics

0 or

$$ and

Wednesday, 18 May 2011

Traditional Media Economics

0 or

$$ and

Anderson-Coate

Wednesday, 18 May 2011

Puzzles

Wednesday, 18 May 2011

Puzzles

Evidence that competition reduces ad prices

Wednesday, 18 May 2011

Puzzles

Evidence that competition reduces ad prices Outlets claim mergers will improve ad revenue

Wednesday, 18 May 2011

Puzzles

Evidence that competition reduces ad prices Outlets claim mergers will improve ad revenue For-profit outlets object to lifting of ad restrictions on public broadcasters

Wednesday, 18 May 2011

Puzzles

Evidence that competition reduces ad prices Outlets claim mergers will improve ad revenue For-profit outlets object to lifting of ad restrictions on public broadcasters Larger outlets earn higher ad revenue per consumer

Wednesday, 18 May 2011

This paper

0 or

$$ and

Wednesday, 18 May 2011

This paper

0

$$ and

Wednesday, 18 May 2011

This paper

0 and/or

$$ and

Wednesday, 18 May 2011

This paper

0 and/or

$$ and

?

Wednesday, 18 May 2011

This paper

0 and/or

$$

?

and

?

Wednesday, 18 May 2011

Model set-up

Wednesday, 18 May 2011

Advertising supply

Wednesday, 18 May 2011

Advertising supply

Two attention periods.

Wednesday, 18 May 2011

Advertising supply

Two attention periods. Two outlets with ad capacity per unit of attention, ai.

Wednesday, 18 May 2011

Advertising supply

Two attention periods. Two outlets with ad capacity per unit of attention, ai. If they have opportunity to choose, consumers select outlet i with probability xi.

Wednesday, 18 May 2011

Advertising supply

Two attention periods. Two outlets with ad capacity per unit of attention, ai. If they have opportunity to choose, consumers select outlet i with probability xi. In a given period, the probability that a consumer can choose is ρ.

Wednesday, 18 May 2011

Advertising supply

Two attention periods. Two outlets with ad capacity per unit of attention, ai. If they have opportunity to choose, consumers select outlet i with probability xi. In a given period, the probability that a consumer can choose is ρ.

Dil = xi − xi (1 − xi )ρ D s = 2 ρ x1 x2

Wednesday, 18 May 2011

Advertising supply

Two attention periods. Two outlets with ad capacity per unit of attention, ai. If they have opportunity to choose, consumers select outlet i with probability xi. In a given period, the probability that a consumer can choose is ρ.

Dil = xi − xi (1 − xi )ρ D s = 2 ρ x1 x2

i's ad inventory = Dil 2ai + D s ai

Wednesday, 18 May 2011

Advertiser demand

Wednesday, 18 May 2011

Advertiser demand

Advertisers want to impress each consumer once over the two periods …

Wednesday, 18 May 2011

Advertiser demand

Advertisers want to impress each consumer once over the two periods … and have heterogeneous values (v) on impressing consumers with distribution F(v); assumed to be U[0,1].

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

Wednesday, 18 May 2011

The impression game

Morning

Afternoon

Outlet 1

Outlet 2

If Starbucks single-homes, it misses impressions. If Starbucks multi-homes, it wastes impressions.
Wednesday, 18 May 2011

The advertiser’s dilemma

Custom analysis of data provided to authors by ComScore of 30 recent large, cross-outlet campaigns

Wednesday, 18 May 2011

The advertiser’s dilemma

Wasted Impressions

Custom analysis of data provided to authors by ComScore of 30 recent large, cross-outlet campaigns

Wednesday, 18 May 2011

Solving the dilemma

Wednesday, 18 May 2011

Solving the dilemma

No switching

Wednesday, 18 May 2011

Solving the dilemma

No switching No tracking

Wednesday, 18 May 2011

Solving the dilemma

No switching No tracking Coordination in time

Wednesday, 18 May 2011

Solving the dilemma

No switching No tracking Coordination in time Pay per click

Wednesday, 18 May 2011

Solving the dilemma

No switching No tracking Coordination in time Pay per click Perfect tracking

Wednesday, 18 May 2011

Idealized ad market

Wednesday, 18 May 2011

Perfect tracking

Wednesday, 18 May 2011

Perfect tracking

Technology

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Advertisers: straightforward strategy, pay for impressions based on prices sorted by consumers type

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Advertisers: straightforward strategy, pay for impressions based on prices sorted by consumers type

Outlets: outsource ad sales and compete for value

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Advertisers: straightforward strategy, pay for impressions based on prices sorted by consumers type

Outlets: outsource ad sales and compete for value

Impediments

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Advertisers: straightforward strategy, pay for impressions based on prices sorted by consumers type

Outlets: outsource ad sales and compete for value

Impediments

Will this reduce advertiser demand? Will outlets adopt this?

Wednesday, 18 May 2011

Perfect tracking

Technology

Browser Plugin

Send consumer visits to network

No wasted impressions

Offers

To advertisers: “Will impress specific consumer x times in specified time period regardless of site.”

To outlets: “If you attract consumers to your network you will receive $ per impression.”

Outcomes

Advertisers: straightforward strategy, pay for impressions based on prices sorted by consumers type

Outlets: outsource ad sales and compete for value

Impediments

Will this reduce advertiser demand? Will outlets adopt this?

Concerns over privacy Ad network market power

Wednesday, 18 May 2011

Profit comparison

No switching

π iNS = D l F −1 (1 − 2ai )2ai

Perfect tracking

π iPT = F −1 (1 − a1 − a2 )ai D s + F −1 (1 − 2ai )2ai D l

Wednesday, 18 May 2011

Profit comparison

No switching

π iNS = Dil F −1 (1 − 2a)2a

Perfect tracking

π iPT = (D s + 2Dil )F −1 (1 − 2a)a

Wednesday, 18 May 2011

Profit comparison

No switching

π iNS = xi F −1 (1 − 2a)2a

Perfect tracking

π iPT = xi F −1 (1 − 2a)2a

Wednesday, 18 May 2011

Realistic ad market

Wednesday, 18 May 2011

Intra-outlet tracking

Content-based tracking Frequency-based tracking Internal tracking
Here, we will consider the frequency-based tracking case

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i

θ i = Dil + 1 D s 2

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i Multi-Home

θ i = Dil + 1 D s 2

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i Multi-Home

θ i = Dil + 1 D s 2
l 3 θ12 = D1l + D2 + 4 D s

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i Multi-Home Multi-Home (2 on i)

θ i = Dil + 1 D s 2
l 3 θ12 = D1l + D2 + 4 D s

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i Multi-Home Multi-Home (2 on i)

θ i = Dil + 1 D s 2
l 3 θ12 = D1l + D2 + 4 D s

θ12 = 1 ′

Wednesday, 18 May 2011

Missed & wasted impressions

Expected Unique Impressions

Single-Home on i Multi-Home Multi-Home (2 on i)

θ i = Dil + 1 D s 2
l 3 θ12 = D1l + D2 + 4 D s

θ12 = 1 ′

θ12 ≤ θ1 + θ 2 = θ12 for ρ > 0 ′
Wednesday, 18 May 2011

Advertiser demand

Price

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

Price Single-homing

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

To impress loyals, want to multi-home … at the cost of wasted switcher impressions

Price Single-homing

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

To impress loyals, want to multi-home … at the cost of wasted switcher impressions

Price Single-homing

Multi-homing

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

To impress loyals, want to multi-home … at the cost of wasted switcher impressions To impress switchers, want to increase frequency … at the cost of wasted loyal impressions

Price Single-homing

Multi-homing

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

To impress loyals, want to multi-home … at the cost of wasted switcher impressions To impress switchers, want to increase frequency … at the cost of wasted loyal impressions

Price Single-homing

Multi-homing Multi-homing + Frequency

Quantity (Advertisers)

Wednesday, 18 May 2011

Advertiser demand

To impress loyals, want to multi-home … at the cost of wasted switcher impressions To impress switchers, want to increase frequency … at the cost of wasted loyal impressions Higher value advertisers more willing to bear costs

Price Single-homing

Multi-homing Multi-homing + Frequency

Quantity (Advertisers)

Wednesday, 18 May 2011

No switching

Price

Multi-homers (1 impression)

Quantity (Impressions)

Wednesday, 18 May 2011

No switching

Price

Supply

Multi-homers (1 impression)

2a Quantity (Impressions)

Wednesday, 18 May 2011

No switching

v=1

Price

Supply

Multi-homers (1 impression)

2a Quantity (Impressions)

Wednesday, 18 May 2011

No switching

v=1

Price

Supply

Multi-homers (1 impression)

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

No switching

v=1

Price

Supply

Multi-homers (1 impression)

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

No switching

v=1

Price

Supply

Multi-homers (1 impression)

p

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

More switchers

v=1

Price

Supply

Multi-homers (1 impression) p
SingleSinglehome on 1 home on 2

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

More switchers

v=1

Price

Supply

Multi-homers (1 impression)

SingleSinglehome on 1 home on 2

p

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

More switchers

v=1

Price

Supply

Multi-homers (1 impression)

↑ D s ⇒↓ p

SingleSinglehome on 1 home on 2

p

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

High switchers

v=1
MH 2 on 1 MH 2 on 2

Price

Supply

Multi-homers (1 impression) p
SingleSinglehome on 1 home on 2

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

High switchers

v=1
MH 2 on 1 MH 2 on 2

Price

Supply

Multi-homers (1 impression) p
SingleSinglehome on 1 home on 2

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

High switchers

v=1
MH 2 on 1 MH 2 on 2

Price

Supply

↑ D s ⇒↑ p

Multi-homers (1 impression) p
SingleSinglehome on 1 home on 2

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

High switchers

v=1
MH 2 on 1 MH 2 on 2

Price

Supply

↑ D s ⇒↑ p
if a high
p

Multi-homers (1 impression)

SingleSinglehome on 1 home on 2

v=p 2a Quantity (Impressions)

Wednesday, 18 May 2011

Incentives to adopt perfect tracking Low ad capacity (a) Profits

Ds

Wednesday, 18 May 2011

Incentives to adopt perfect tracking Low ad capacity (a) Profits

Imperfect Tracking

Ds

Wednesday, 18 May 2011

Incentives to adopt perfect tracking Low ad capacity (a) Profits Perfect Tracking

Imperfect Tracking

Ds

Wednesday, 18 May 2011

Incentives to adopt perfect tracking High ad capacity (a) Profits

Imperfect Tracking

Perfect Tracking

Ds

Wednesday, 18 May 2011

Incentives to adopt perfect tracking High ad capacity (a) Profits

Imperfect Tracking

Perfect Tracking

Ds

Wednesday, 18 May 2011

Incentives to adopt perfect tracking High ad capacity (a) Profits

Imperfect Tracking

Perfect Tracking

Ds

Wednesday, 18 May 2011

Mergers

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Merge only if a and Ds not too high

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Merge only if a and Ds not too high

No intra-outlet tracking

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Merge only if a and Ds not too high

No intra-outlet tracking

Neutral unless can price discriminate between single and multi-homers

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Merge only if a and Ds not too high

No intra-outlet tracking

Neutral unless can price discriminate between single and multi-homers

Wednesday, 18 May 2011

Mergers

Allow intra-outlet tracking

Merge only if a and Ds not too high

No intra-outlet tracking

Neutral unless can price discriminate between single and multi-homers

Mergers may increase profits even when Ds = 0

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content …

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market …

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market …

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market … and reduce adverse effect of switching …

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market … and reduce adverse effect of switching …

Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market … and reduce adverse effect of switching … Causing impression prices to rise.
Quantity (Impressions)

Wednesday, 18 May 2011

Public broadcasters & blogs

Price

Supply

Blogs and other non-ad content … decrease available ad capacity in the market … and reduce adverse effect of switching … Causing impression prices to rise.
Quantity (Impressions)

Wednesday, 18 May 2011

Positional advantages in advertising markets

Wednesday, 18 May 2011

Positional advantages in advertising markets

Content quality

Wednesday, 18 May 2011

Positional advantages in advertising markets

Content quality

Paywalls

Wednesday, 18 May 2011

Positional advantages in advertising markets

Content quality

Paywalls

Magnet content

Wednesday, 18 May 2011

Asymmetric Quality

x1 = x2
Low Ds v=1 v=1
MH 2 on 1 MH 2 on 2

High Ds

Multi-homers (1 impression)

Multi-homers (1 impression)

SingleSinglehome on 1 home on 2

SingleSinglehome on 1 home on 2

v=p

v=p

Wednesday, 18 May 2011

Asymmetric Quality

x1 > x2
Low Ds v=1 v=1
MH 2 on 1 MH 2 on 2

High Ds

Multi-homers (1 impression)

Multi-homers (1 impression)

SingleSinglehome on 1 home on 2

SingleSinglehome on 1 home on 2

v=p

v=p

Wednesday, 18 May 2011

Asymmetric Quality

x1 > x2
Low Ds v=1 v=1
MH 2 on 2

High Ds

Multi-homers (1 impression)

Multi-homers (1 impression)
Single-home on 1 Single-home on 2

v = p1 v = p2

Single-home on 1 Single-home on 2

v = p1 v = p2

Wednesday, 18 May 2011

Asymmetric Quality

x1 > x2
Low Ds v=1 v=1
MH 2 on 2

High Ds

Multi-homers (1 impression)

Multi-homers (1 impression)
Single-home on 1 Single-home on 2

v = p1 v = p2

Single-home on 1 Single-home on 2

v = p1 v = p2

Outlet 1 gains a positional advantage in the advertising market
Wednesday, 18 May 2011

Quality Investments

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion.

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit.

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Investment
0.20

0.18

0.16

0.14

0.6

0.7

0.8

0.9

1.0

Quality  Differen0al

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Investment
0.20

0.18

0.16

0.14

0.6

0.7

0.8

0.9

1.0

Perfect Tracking

Quality  Differen0al

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Investment
0.20

Imperfect Tracking

0.18

0.16

0.14

0.6

0.7

0.8

0.9

1.0

Perfect Tracking

Quality  Differen0al

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Investment
0.20

Imperfect Tracking

0.18

0.16

Competing for Value Perfect Tracking

0.14

0.6

0.7

0.8

0.9

1.0

Quality  Differen0al

Wednesday, 18 May 2011

Quality Investments

Under perfect tracking capturing an additional reader increases profits in a linear fashion. Under imperfect tracking, greater readership improves position and so has a greater increment to profit. Consider game where outlets invest in quality simultaneously

Investment
0.20

Imperfect Tracking

0.18

0.16

Competing for Value Perfect Tracking

0.14

0.6

0.7

0.8

0.9

1.0

Quality  Differen0al

Competing for Position

Wednesday, 18 May 2011

Paywalls

Wednesday, 18 May 2011

Paywalls

“No [it’s not a two way street with Google sending traffic] What’s the point of someone coming occasionally who likes a headline they see on Google? Sure we go out and say we have so many millions of visitors. The fact is that there is not enough advertising in the world to go around to make all the websites profitable. We’d rather have fewer people coming to our websites but paying. They don’t suddenly become loyal readers of our websites.” (Rupert Murdoch)

Wednesday, 18 May 2011

Paywalls

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments

↑ ρ12 ,↓ ρ21

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions

↑ ρ12 ,↓ ρ21

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions

↑ ρ12 ,↓ ρ21 ↓ ρ21

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions Limited paywall

↑ ρ12 ,↓ ρ21 ↓ ρ21

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions Limited paywall

↑ ρ12 ,↓ ρ21 ↓ ρ21 ↑ ρ12

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions Limited paywall

↑ ρ12 ,↓ ρ21 ↓ ρ21 ↑ ρ12

D <D
l 1

l 2

Wednesday, 18 May 2011

Paywalls

D = x1 − x1 x2 ρ12
l 1 l D2 = x2 − x2 x1ρ21

D s = ( ρ12 + ρ21 )x1 x2
Micropayments Subscriptions Limited paywall

↑ ρ12 ,↓ ρ21 ↓ ρ21 ↑ ρ12

D <D
l 1

l 2

Paywalls may cause a positional disadvantage in advertising markets
Wednesday, 18 May 2011

Wednesday, 18 May 2011

One more thing ...

Wednesday, 18 May 2011

Magnet Content

Multi-Home 2 on 2

Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

Magnet Content

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions)
Single-home on 1 Single-home on 2 (2 impressions) Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

Magnet Content

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions) ... and so can only serveSingle-home on 2 one (2 impressions) period of attention. Single-home on 2
Single-home on 1 (2 impressions) Single-home on 1

Wednesday, 18 May 2011

Magnet Content

ρ =1

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions) ... and so can only serveSingle-home on 2 one (2 impressions) period of attention. Single-home on 2
Single-home on 1 (2 impressions) Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions) ... and so can only serveSingle-home on 2 one (2 impressions) period of attention. Single-home on 2
Single-home on 1 (2 impressions) Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions) ... and so can only serveSingle-home on 2 one (2 impressions) period of attention. Single-home on 2
Single-home on 1 (2 impressions) Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )

Suppose that Outlet 2 has Single-home on 1 Multi-Home 2 on 2 limited content (2 impressions) ... and so can only serveSingle-home on 2 one (2 impressions) period of attention. Single-home on 2
Single-home on 1 (2 impressions) Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2

Multi-Home 2 on 2

Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1 Single-home on 2 (2 impressions)

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2 Single-home on 1 (2 impressions)

High x2

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

v = p2

Single-home on 1

Wednesday, 18 May 2011

D1l = x1 − x1 x2

Magnet Content

ρ =1

l D2 = 0

D s = x2 (1 + x1 )
Low x2 v=1
Multi-Home 2 on 2

High x2 v=1
Single-home on 1 (2 impressions)

Single-home on 1

Single-home on 2 (2 impressions)

v = p1 v = p2

Single-home on 2 (2 impressions)

v = p2 v = p1

Single-home on 1

Wednesday, 18 May 2011

Magnet Content

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

Wednesday, 18 May 2011

Magnet Content

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise.

Wednesday, 18 May 2011

Magnet Content

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content.

Wednesday, 18 May 2011

Magnet Content

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage.

Wednesday, 18 May 2011

Magnet Content

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

150 million US accounts
Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

150 million US accounts 95% users visit once every 2 days
Profits
0.20

Full content provider

0.15

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

150 million US accounts 95% users visit once every 2 days
Profits

10% of 0.20 site visits US
0.15

Full content provider

0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

150 million US accounts 95% users visit once every 2 days
Profits

10% of 0.20 site visits US

Full content provider

30% of 0.15 display ads US
0.10

Imperfect Tracking Limited content provider

0.05

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

150 million US accounts 95% users visit once every 2 days
Profits

10% of 0.20 site visits US

Full content provider

30% of 0.15 display ads US Most users provide content
0.10

Imperfect Tracking

0.05

Limited content provider

0.2

0.4

0.6

0.8

1.0

x2

As limited content provider’s share rises, industry profits rise. Twice the return to magnet content than full content. Higher return per reader due to positional advantage. Evolution away from frequency and towards reach.
Wednesday, 18 May 2011

Conclusions

Wednesday, 18 May 2011

Conclusions

The efficient operation of advertising markets are dependent upon consumer behavior.

Wednesday, 18 May 2011

Conclusions

The efficient operation of advertising markets are dependent upon consumer behavior. A combination of consumer switching and imperfect tracking can explain competitive effects in advertising markets for news media.

Wednesday, 18 May 2011

Conclusions

The efficient operation of advertising markets are dependent upon consumer behavior. A combination of consumer switching and imperfect tracking can explain competitive effects in advertising markets for news media. Tracking technologies may assist in efficiency but adoption faces impediments.

Wednesday, 18 May 2011

Conclusions

The efficient operation of advertising markets are dependent upon consumer behavior. A combination of consumer switching and imperfect tracking can explain competitive effects in advertising markets for news media. Tracking technologies may assist in efficiency but adoption faces impediments. In addition to deterring consumers, paywalls may cause outlets to have a positional disadvantage in advertising markets.

Wednesday, 18 May 2011

Conclusions

The efficient operation of advertising markets are dependent upon consumer behavior. A combination of consumer switching and imperfect tracking can explain competitive effects in advertising markets for news media. Tracking technologies may assist in efficiency but adoption faces impediments. In addition to deterring consumers, paywalls may cause outlets to have a positional disadvantage in advertising markets. Incentives to provide content move from full line provision to magnet but limited content provision.

Wednesday, 18 May 2011

Future directions

Wednesday, 18 May 2011

Future directions

Capabilities

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering

Fast cycle

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle Reputation for accuracy

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering Advertising sales

Fast cycle Reputation for accuracy

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering Advertising sales

Fast cycle Reputation for accuracy Printing & distribution

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering Advertising sales

Fast cycle Reputation for accuracy Printing & distribution

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering Advertising sales

Fast cycle Reputation for accuracy Printing & distribution

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering Advertising sales

Fast cycle Reputation for accuracy

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Established firms foresaw disruption

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Future directions

Capabilities

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Necessarily shared assets Established firms foresaw disruption

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Future directions

Capabilities
Limited

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Necessarily shared assets Established firms foresaw disruption

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Future directions

Capabilities
Limited 30min

Information gathering Filtering

Fast cycle Reputation for accuracy

Advertising sales

Necessarily shared assets Established firms foresaw disruption

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Future directions

Capabilities
Limited 30min

Information gathering Filtering

Fast cycle Reputation for accuracy
OS?

Advertising sales

Necessarily shared assets Established firms foresaw disruption

Can these co-exist in the one entity?

Wednesday, 18 May 2011

Will the Internet Destroy the News Media?

Wednesday, 18 May 2011

Will the Internet Destroy the News Media?

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

0

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

Single-homer surplus = (Dil + 1 D s )(vi − p) 2

0

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

Single-homer surplus = (Dil + 1 D s )(vi − p) 2
l 3 Multi-homer surplus = (D1l + D2 + 4 D s )v − p

0

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

Single-homer surplus = (Dil + 1 D s )(vi − p) 2
l 3 Multi-homer surplus = (D1l + D2 + 4 D s )v − p

Multi-homer surplus (2 on i)
0
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
l 3 Multi-homer surplus = (D1l + D2 + 4 D s )v − p

Multi-homer surplus (2 on i)
0
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
l 3 Multi-homer surplus = (D1l + D2 + 4 D s )v − p

vi
0

Multi-homer surplus (2 on i)
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
l 3 Multi-homer surplus = (D1l + D2 + 4 D s )v − p

p
0

vi

Multi-homer surplus (2 on i)
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
D lj (v − p) + 1 D s (v − 2 p) > 0 4

p
0

vi

Multi-homer surplus (2 on i)
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2

v12
p
0

D lj (v − p) + 1 D s (v − 2 p) > 0 4

vi

Multi-homer surplus (2 on i)
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
D lj + 1 D s 2 D lj +1 4 D
s

p v12
p
0

D lj (v − p) + 1 D s (v − 2 p) > 0 4

vi

Multi-homer surplus (2 on i)
3 = v − (2Dil + D lj + 2 D s )p

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

(Dil + 1 D s )(vi − p) = 0 2
D lj + 1 D s 2 D lj +1 4 D
s

p v12
p
0

D lj (v − p) + 1 D s (v − 2 p) > 0 4

vi
1 4

D s v > (Dil + 1 D s ) p 2

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1

v12 ′
D lj + 1 D s 2 D lj +1 4 D
s

(Dil + 1 D s )(vi − p) = 0 2
D lj (v − p) + 1 D s (v − 2 p) > 0 4

p v12
p
0

vi
1 4

D s v > (Dil + 1 D s ) p 2

Wednesday, 18 May 2011

Sorting outcome

If capacities not too different, there exists a single market clearing price 1
Dil + 1 D s 2
1 4

Ds

′ p v12

(Dil + 1 D s )(vi − p) = 0 2
D lj (v − p) + 1 D s (v − 2 p) > 0 4

D lj + 1 D s 2 D lj +1 4 D
s

p v12
p
0

vi
1 4

D s v > (Dil + 1 D s ) p 2

Wednesday, 18 May 2011

Market Clearing

1
Dil + 1 D s 2
1 4

Ds

′ p v12

D lj + 1 D s 2 D lj +1 4 D
s

p v12
p
0

vi

Wednesday, 18 May 2011

Market Clearing

1
Dil + 1 D s 2
1 4

Ds

′ p v12

D lj + 1 D s 2 D lj +1 4 D
s

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

vi

Wednesday, 18 May 2011

Market Clearing

1
Dil + 1 D s 2
1 4

Ds

′ p v12

D lj + 1 D s 2 D lj +1 4 D
s

(D l + 1 D s )2(v12 − v12 ) ′ 2

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

vi

Wednesday, 18 May 2011

Market Clearing

1
Dil +1D 2
1 4 s

Ds

′ p v12

(D l + 1 D s )3(1 − v12 ) ′ 2 (D l + 1 D s )2(v12 − v12 ) ′ 2

D lj + 1 D s 2 D lj +1 4 D
s

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

vi

Wednesday, 18 May 2011

Market Clearing

1
Dil +1D 2
1 4 s

Ds

′ p v12

(D l + 1 D s )3(1 − v12 ) ′ 2 (D l + 1 D s )2(v12 − v12 ) ′ 2

D lj + 1 D s 2 D lj +1 4 D
s

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

vi
Market Demand for Impressions

Wednesday, 18 May 2011

Market Clearing

1
Dil +1D 2
1 4 s

Ds

′ p v12

(D l + 1 D s )3(1 − v12 ) ′ 2 (D l + 1 D s )2(v12 − v12 ) ′ 2

D lj + 1 D s 2 D lj +1 4 D
s

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

vi
Market Demand for Impressions Market Supply of Impressions

Wednesday, 18 May 2011

Market Clearing

1
Dil +1D 2
1 4 s

Ds

′ p v12

(D l + 1 D s )3(1 − v12 ) ′ 2 (D l + 1 D s )2(v12 − v12 ) ′ 2
l 2a1 D1l + 2a2 D2

D lj + 1 D s 2 D lj +1 4 D
s

p v12
(D l + 1 D s )(v12 − vi ) 2
p
0

+(a1 + a2 )D s

vi
Market Demand for Impressions Market Supply of Impressions

Wednesday, 18 May 2011

Market Clearing

1
Dil + 1 D s 2
1 4

Ds

′ p v12

D lj + 1 D s 2 D lj + 1 D s 4

p v12
p
0

3 a1 + a2 = 1 (v12 − vi ) + (v12 ' − v12 ) + 2 (1 − v12 ' ) 2

vi
Market Demand for Impressions Market Supply of Impressions

Wednesday, 18 May 2011

Market Clearing

1

v12 ′ v12 vi
Market Demand for Impressions 0 Market Supply of Impressions

D s (2 − D s ) p= (3 − 2(a1 + a2 )) s s 4 + D (2 − D )

Wednesday, 18 May 2011

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