The document discusses how Western European newspapers approach bundling of online content, evaluating strategies like pay-per-view and subscriptions. It presents research findings on consumer behavior and market influences, emphasizing the different models adopted across countries. The critique section analyzes the study's methods and interpretations of results related to bundling as a strategy tool.

1. To Bundle or Not to Bundle?
How Western European Newspapers
Package Their Online Content
Aleksey Zhmutskiy | Yulia An
Media Economics I

2. today we'll talk about
Overview of the paper
We’ll summarize some main
points in Bleyen & Van Hove
(2010).
www.ft.com/intl/triplet

3. today we'll talk about
Critique of the paper
We’ll pose a critique to the
study methods and results
interpretation.
www.ft.com/intl/triplet

4. today we'll talk about
Overview of the paper
We’ll summarize some main
points in Bleyen & Van Hove
(2010).
www.ft.com/intl/triplet

5. Overview of the paper
Information goods bundling

6. Bundling means the way of selling two or more
separate products and/or services together
for a single price that is usually lower than for
each distinct good.
– Adams & Yellen, 1976

7. Digitalization and cost saving
▼ marginal production cost favor bundling
▼ billing cost favor independent selling
▼ distribution cost favor independent selling

8. Bundling and price discrimination
Pure
bundling
heterogeneous valuations of separate components
Bakos & Brynjolfsson, 1998; Shapiro & Varian, 1998
Independent
selling
heterogeneous valuations of separate components +
price of articles in a bundle below their marginal cost
Bleyen & Ban Hove, 2010
Mixed
bundling
customers with high WTP for bundle and high
WTP for the components Bleyen & Ban Hove, 2010
Bundling vs
independent
selling
heterogeneous valuations of separate components
Fay & MacKie-Mason, 1999

9. Overview of the paper
Sample and methods

10. Binary logic
regression
for separate analysis
of decisions
Multinomial
logic regression
for simultaneous
analysis of decisions
Research question
Why do some newspaper Web sites rely on “traditional”
subscriptions, whereas other sites (also) offer pay-per-view?

11. Three categories of variables
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)

12. Three categories of variables
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
Price annual print
subscription
Market share
Offer of different bundle
options
Type
(quality – mid-market –
popular)

13. Three categories of variables
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
Contribution of
advertising to daily
newspapers’ revenues
Advertising expenditure
shares newspapers
Number of broadband
subscribers—DSL

14. Three categories of variables
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
Average price (annual
print subscription)
Percentage of other
newspapers offering
PPV/ PDF/site
subscription
Market share of
other newspapers
offering PPV/ PDF/site
subscription

15. Overview of the paper
Results: Binary logic regression

16. Site subscription | 23 newspapers (28%)
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
–– site and PDF
subscription:
alternatives
–– quality newspapers
more often than the
popular
–– PPV and/or credits-
card option: site
subscription
–– high share of
advertising
expenditure on
newspapers: less
probability of site
subscription
–– high number of
newspapers that offer
a site subscription:
probability of site
subscription offer by
the newspaper itself

17. PDF subscription | 36 newspapers (44%)
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
–– site and PDF
subscription:
alternatives
–– high market share:
PDF subscription
–– high advertising
expenditure:
PDF subscription
–– high number of
DSL broadband
subscribers:
less PDF subscription
–– high market share
of newspapers in
the same segment,
which offer PDF
subscriptions:
individual newspapers
copy this behavior

18. Pay-per-view | 16 newspapers (20%)
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
–– high print content
price + quality (type):
PPV offer
–– credits-card payment
and PPV options:
complements
–– charged archive:
higher probability to
offer PPV
–– high share of
advertising in the
newspapers’ revenue:
less possibility of PPV
offer
–– high average price
of the annual print
subscription in the
country:
possibility of PPV offer
–– high market share,
numbers and
market segment of
competitors with PPV:
possibility of PPV offer

19. Overview of the paper
Results: Multinomial logic regression

20. Findings of the multinomial analysis supported the results of
the binomial one.
Newspaper-specific Country-specific
Market-specific
(mimicking behavior)
–– quality newspapers:
site subscription or
PPV offer
–– high price of print
subscription: PPV/
PDF/site subscription
–– high market share:
PDF subscription offer
–– high advertising
expenditure on the
newspapers:
PDF subscription
–– high advertising
expenditure on the
newspapers:
less probability of
site subscription
–– multinomial analysis is
not possible
* * *

21. Concluding remarks
The share of the used online strategies differed
among the countries.
–– PDF and site subscriptions as substitutes
–– credits-card payment and PPV options as
complements
–– striving to balance between loyal subscribers and
occasional visitors
–– striving to use offline revenue model in the Internet
(PDF subscription)

22. Concluding remarks
The share of the used online strategies differed
among the countries.
–– quality newspapers: site subscription or PPV offer
–– popular newspapers: free
–– mimicking behavior was proved, in particular for
PDF subscription and PPV offer.

23. today we'll talk about
Critique of the paper
We’ll pose a critique to the
study methods and results
interpretation.
www.ft.com/intl/triplet

24. Critique of the paper
Bundling as a strategy tool

25. Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Print subscription
Print sub + single copy
Single copy sales

26. Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Print subscription
Print sub + single copy
Single copy sales

27. Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Print subscription
Print sub + single copy
Single copy sales

28. Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Print subscription
Print sub + single copy
Single copy sales

29. Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Print subscription
Print sub + single copy
Single copy sales

30. Print subscription
Print sub + single copy
Single copy sales
Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Meta-bundling

31. Print subscription
Print sub + single copy
Single copy sales
Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Meta-bundling
Bleyen & Van Hove (2007)

32. Print subscription
Print sub + single copy
Single copy sales
Pure bundling
Mixed bundling
Independent selling
Online Offline
Advertisers
Readers
Pure bundling
Mixed bundling
Independent selling
Online subscription
Online sub + PPV
Pay-per-view (PPV)
Hybrid bundling
Gao (2009)

33. X
Extreme differentiation A
-1
Extreme differentiation B
10
Advertisers Readers
Decrease
subscription fee
Anderson & Gabszewicz, 2006; Seamans & Zhu, 2014; Peitz & Valetti,
2005; Anderson & Coate, 2005; Mullainathan & Shleifer, 2005

34. Advertisers Readers
X
Extreme differentiation A
-1
Extreme differentiation B
10
Increase
subscription fee
Anderson & Gabszewicz, 2006; Seamans & Zhu, 2014; Peitz & Valetti,
2005; Anderson & Coate, 2005; Mullainathan & Shleifer, 2005

35. X
Extreme differentiation A
-1
Extreme differentiation B
10
Advertisers Readers
More likely: PDF subscription

36. Advertisers Readers
X
Extreme differentiation A
-1
Extreme differentiation B
10
More likely: Site subscription

37. Mimicking behavior
may be mistaken by natural market forces
and reflect the balance between advertising
revenues and content monetization.
* * *

38. Mimicking behavior
may be mistaken by natural market forces
and reflect the balance between advertising
revenues and content monetization.
PDF subscription
total # of newspapers
* * *

39. Mimicking behavior
may be mistaken by natural market forces
and reflect the balance between advertising
revenues and content monetization.
Pay-per-view
same type newspapers
* * *

40. to recap, we talked about
Overview of the paper
We discussed main results of
Bleyen & Van Hove.
www.ft.com/intl/triplet

41. to recap, we talked about
Critique of the paper
We posed a critique to their
study methods and discussed
bundling as a strategy tool.
www.ft.com/intl/triplet

42. Adams, W.J., & Yellen, J.L. (1976). Commodity bundling and the burden of monopoly. Quarterly Journal of
Economics, 90(3), 475-498.
Anderson, S.P., & Coate, S. (2005). Market provision of broadcasting: A welfare analysis. Review of Economic Studies
72(4), 947–972.
Anderson, S.P., & Gabszewicz, J.J. (2006). The media and advertising: A tale of two-sided markets. In V. Ginsburgh &
D. Throsby (Eds.), Handbook of the Economics of Art and Culture (pp. 567-614). Amsterdam: Elsevier.
Bakos, Y., & Brynjolfsson, E. (1999). Bundling information goods: Pricing, profits and efficiency. Management Science,
45, 1613–1630.
Bleyen, V., & Van Hove, L. (2007). Western European newspapers and their online revenue models: An overview. First
Monday, 12(12). Retrieved from http://ssrn.com/abstract=1077545.
Bleyen, V., & Van Hove, L. (2010). To bundle or not to bundle? How Western European newspapers package their
online content. Journal of Media Economics, 23, 117-142.
Fay, S., & MacKie-Mason, J. (1999). Competition between firms that bundle information goods. In I. Vogelsand and B.
M. Compaine (Eds.), Upheaval–The Internet. Proceedings of the 27th annual Telecom Policy research conference
(pp. 277–308). Alexandria, VA.
Gao, M. (2009). When to allow buyers to sell? Bundling in mixed two-sided markets. Unpublished manuscript.
Retrieved from http://phd.london.edu/mgao/assets/documents/Ming_Gao_JM_Paper.pdf.
Mullainathan, S., & Shleifer, A. (2005). The Market for News. American Economic Review, 95(4), 1031-1053.
Peitz, M., & Valletti, T. (2005). Content and advertising in the media: Pay-tv versus free-to-air. Mimeo. Imperial
College, London. CEPR Working Paper #4771.
Seamans, R., & Zhu, F. (2014). Responses to entry in multi-sided markets: The impact of Craigslist on local
newspapers. Management Science, 60(2), 476-493.
Shapiro, C., & Varian, H. (1998). Information rules: A strategic guide to the network economy. Boston: Harvard
References
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