The Economics of Internet Media

Martin Peitz and Markus Reisinger

No 14-23, Working Papers from University of Mannheim, Department of Economics

Abstract: We survey the economics literature on media as it applies to the Internet. The Internet is an important driver behind media convergence and connects information and communication technologies. While new Internet media share some properties with traditional media, several novel features have appeared: On the content side, aggregation by third parties that have no editorial policy and user-generated content have become increasingly important. On the advertiser side, fine-tuned tailoring and targeting of ads based on individual user characteristics are common features on many Internet media and social networks. On the user side, we observe increased possibilities of time-shifting, multi-homing, and active search. These changes have gone hand-in-hand with new players entering media markets, including search engines and Internet service providers. Some of these players face novel strategic considerations, such as how to present search results. In response to these changes, an emerging economics literature focuses on the allocative and welfare implications of this new media landscape. This paper is an attempt to organize these contributions and provide a selective account of novel economic mechanisms that shape market outcomes of Internet media. A large body of work has focused on the advertising part of the industry, while some studies also look at content provision and the interaction between the two.

Keywords: Internet; media economics; digital media; targeting; news aggregation; search advertising; display advertising; two-sided markets (search for similar items in EconPapers)
JEL-codes: D21 D22 L13 L82 L86 M37 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com, nep-cul, nep-ict and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:mnh:wpaper:37116

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