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Upstream competition, exclusive content provision, and vertical integration in media markets

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  • Kiho Yoon

    (Department of Economics, Korea University 145 Anam-ro, Seongbuk-gu, Seoul, Korea 02841)

Abstract

With a multilateral vertical contracting model, we examine the contractual form and the vertical structure in media markets. We analyze the trade of content by the Nash bargaining solution and the downstream competition by the Hotelling location model. We show that the possibility of exclusive contracts rises when the value of the premium content increases, the degree of horizontal differentiation in the downstream market decreases, the importance of advertising revenue decreases, and the relative bargaining power of upstream firm decreases. We also show that vertical separation (full vertical integration, respectively) is plausible when the relative bargaining power of upstream firm is strong (weak, respectively).

Suggested Citation

  • Kiho Yoon, 2020. "Upstream competition, exclusive content provision, and vertical integration in media markets," Discussion Paper Series 2009, Institute of Economic Research, Korea University.
    • Handle: RePEc:iek:wpaper:2009
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    References listed on IDEAS

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    More about this item

    Keywords

    content provision; exclusive contract; vertical integration; media market; video programming.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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