What's Fit To Print: The Effect Of Ownership Concentration On Product Variety In Daily Newspaper Markets

TL;DR

This study investigates how ownership concentration in daily newspaper markets influences product variety, finding that increased concentration can lead to more differentiation and readership, challenging traditional antitrust assumptions.

Contribution

It provides empirical evidence that ownership concentration can enhance product variety and readership in newspaper markets, contrary to conventional beliefs.

Findings

Ownership concentration increases product differentiation.

Higher concentration correlates with increased readership.

Consolidation may benefit consumers by increasing content diversity.

Abstract

This paper examines the effect of ownership concentration on product position, product variety and readership in markets for daily newspapers. US antitrust policy presumes that mergers reduce the amount and diversity of content available to consumers. However, the effects of consolidation in differentiated product markets cannot be determined solely from theory. Because multi-product firms internalize business stealing, mergers may encourage firms to reposition products, leading to more, not less, variety. Using data on reporter assignments from 1993-1999, results show that differentiation and variety increase with concentration. Moreover, there is evidence that additional variety increases readership, suggesting that concentration benefits consumers.