Advertising and the Distribution of Content
AbstractThis paper examines incentives for exclusive distribution of content in the presence of advertising. A monopoly seller of content - such as televisation rights to popular sports - may contract with one or both of two competing distributors, charging lump-sum fees. When distributors are subscription-funded, exclusive sale to a single buyer is the seller's profit-maximising choice, even when distributors also sell advertising airtime. When distributors are purely advertising-funded, however, non-exclusive contracting may instead be preferred. Advertising revenues accruing directly to the content provider may also generate a preference for non-exclusivity even when selling to subscription-funded distributors. The analysis has implications for the distribution of content to pay TV and free-to-air broadcasters, and for internet distribution of content.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9079.
Date of creation: Aug 2012
Date of revision:
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Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
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