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Can Advertising Make Free-to-Air Broadcasting More Profitable Than Pay-TV?

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  • Stefan Kesenne

    (University of Antwerp)

Abstract

In this paper, we derive, based on a simple microeconomic model, under what conditions free-TV can more profitable than pay-TV in sports broadcasting. The most important factors here are the level, not the elasticity, of the demand for televised sports, as well as the advertisers’ willingness to pay. Also the spectators’ aversion to interruptions for advertising can play a role.

Suggested Citation

  • Stefan Kesenne, 2012. "Can Advertising Make Free-to-Air Broadcasting More Profitable Than Pay-TV?," International Journal of Sport Finance, Fitness Information Technology, vol. 7(4), pages 358-364, November.
    • Handle: RePEc:jsf:intjsf:v:7:y:2012:i:4:p:358-364
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    More about this item

    Keywords

    sports media; broadcasting; advertising; profitability; pay-TV; free-TV;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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