Study about coalition possibilities of internet news media firms

Abstract

The platform for the consumption of news content has shifted from the printed newspapers to the Internet. This resulted in rapid declines in the reach of newspapers worldwide. When reading news stories online, people in Korea use Internet portal sites more often than newspaper companies’ websites. Internet portals share some of their revenues with newspaper firms on individual contract basis, but newspaper firms keep complaining that Internet portals are not providing a fair share with them. This paper investigates whether newspaper firms can make coalitions among themselves to increase their negotiation power against Internet portals by using web traffic data. This paper found that internet news media firms could make stable coalitions in certain conditions, which mean they need commitment device to sustain the coalition. In short, newspaper firms should make revenue sharing contract with Internet portal not individually but as a group, and the stability of coalitions can be achieved with a commitment device, suggested in the paper.