What Do News Aggregators Do? Evidence from Google News in Spain and Germany

Abstract

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-indifferences methodology, this paper empirically examines the relevance of these two effects. We show the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets between 8% and 14%, and that this effect was larger in outlets with less overall daily visits and a lower share of international visitors. We also find evidence suggesting that the shutdown decreased online advertisement revenues and advertising intensity at news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results demonstrate the existence of a net market-expansion effect through which news aggregators increase consumers' awareness of news outlets' contents, thereby increasing their number of visits.

Digital News Consumption and Copyright Intervention: Evidence from Spain Before and After the 2015 “Link Tax”

“…The purpose of analyzing these time series is to determine if there is a visible shift in the average reach of these sites after the copyright law came into force in 1 January 2015. In the light of prior research (Calzada & Gil, ; Athey, Mobius, & Pal, ), our hypothesis is that the “link tax” had a negative impact on the traffic of digital‐born outlets (the younger and smaller publishers) and no impact on the more established digital‐born outlets. To determine if this hypothesis holds, we use time series modelling and, in particular, a technique known as intervention analysis (Cryer & Chan, ).…”

“…A sparser and more fragmented network means that news sites share less audience, thus becoming more differentiated in who consumes their news. One possible explanation for this reduction in the number of overlapping ties is that, in the absence of aggregators like Google News, consumers do not explore so widely the available news sources – a possibility that prior research supports (Calzada & Gil, ; Athey, Mobius & Pal, ). The audience data we analyze would reflect this effect as a decreasing overlap between sites.…”

“…More recent research offers a better quantification of the impact. In one study, the evidence suggests that the shutdown of Google News in Spain resulted in a decrease of daily visits to Spanish news outlets by 11% (Calzada & Gil, ). Another study shows a decrease of 20% in overall news consumption among Google News users in the period after the search engine decided to close its portal (Athey, Mobius & Pal, ).…”

“…Underlying these regulatory efforts there is an assumption that access to online information is mainly driven by the linking activity of news providers (Calzada & Gil, ; Posada de la Concha et al, ; Xalabarder, ; Athey, Mobius & Pal, ). Whether links are used to steal or boost audience flow depends on who makes the argument, i.e .…”

“…What this suggests is that imposing a copyright fee on links might not drastically change the way in which consumers access news online. On the other hand, there is evidence that the Google News shutdown did reduce the consumption of news, although this decrease affected mostly the smaller publishers (Calzada & Gil, 2016;Athey, Mobius & Pal, 2017).…”