Strategies for Selling Paid Content on Newspaper and Magazine Web Sites: An Empirical Analysis of Bundling and Splitting of News and Magazine Articles

More and more newspaper and magazine Web sites offer paid content. However, selling information goods at a price higher than the marginal cost means finding a strategy for product or price differentiation. A possible strategy to solve this problem is the bundling of information goods. In this article, we analyze empirically, with quantitative statistic methods, strategies for selling bundled and unbundled content on newspaper and magazine Web sites. This analysis is based on the theoretical ap-proach of Bakos and Brynjolfsson (1996). The article shows that a cannibalization takes place if the same bundle of information goods is offered in offline (printed) and online (digital) media at the same time. Traditional bundling models work nonethe-less in an online media if the online content is rebundled (e.g., as dossiers about a topic), but thereby do not compete with the printed version. For studying the economics of paid content, newspaper and magazine markets are of particular importance and interest, because the convergence of media is very strong in these markets, so the submarkets of online and print are often interrelated (Chyi Sylvie, 2000). Many news-