News Media, Digital Platforms and Content Sharing

The recent ‘News Media Bargaining Code’ has raised controversy as Australia attempts to force digital platforms to pay news publishers for their links and snippets. To understand the impacts of the bargaining code on both the sustainability and quality of journalism, we develop a model where there are two types of news content available to consumers : full news from the news publisher and snippets on the platform. We show that the bargaining code strictly improves the news publisher’s welfare but increases their joint investment incentives if and only if the relative investment in snippets is suffciently large. We further establish that commercial agreements are a promising alternative that strictly increases both the welfare of news publishers and the quality of their news. Our results suggest that the bargaining code is better used as an indirect threat to promote fair commercial negotiations, rather than used directly.