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


  • Stefan Kesenne

    () (University of Antwerp)


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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    References listed on IDEAS

    1. Dietl Helmut & Duschl Tobias & Franck Egon & Lang Markus, 2012. "A Contest Model of a Professional Sports League with Two-Sided Markets," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(3), pages 336-359, June.
    2. Egon Franck, 2010. "Private Firm, Public Corporation or Member’s Association Governance Structures in European Football," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 108-127, May.
    3. Dietl, Helmut & Duschl, Tobias, 2012. "The organization of professional sports leagues: A comparison of European and North-American leagues from the perspective of platform organization," Edition HWWI: Chapters,in: Sport und Sportgroßveranstaltungen in Europa - zwischen Zentralstaat und Regionen, pages 111-126 Hamburg Institute of International Economics (HWWI).
    4. Helmut Dietl & Christian WeingŠrtner, 2011. "The Effect of Professional Football Clubs' Legal Structure on Sponsoring Revenue," Working Papers 0041, University of Zurich, Center for Research in Sports Administration (CRSA).
    5. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    6. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-143, Summer.
    7. Helmut Dietl, 2010. "Erfolgsstrategien im Plattformwettbewerb," Working Papers 0123, University of Zurich, Institute for Strategy and Business Economics (ISU).
    8. Dietl, Helmut M. & Franck, Egon & Hasan, Tariq & Lang, Markus, 2009. "Governance of professional sports leagues--Cooperatives versus contracts," International Review of Law and Economics, Elsevier, vol. 29(2), pages 127-137, June.
    9. Helmut M. Dietl & Martin Grossmann & Markus Lang, 2011. "Competitive Balance and Revenue Sharing in Sports Leagues With Utility-Maximizing Teams," Journal of Sports Economics, , vol. 12(3), pages 284-308, June.
    10. Daniel R. Marburger, 2002. "Property Rights and Unilateral Player Transfers in a Multiconference Sports League," Journal of Sports Economics, , vol. 3(2), pages 122-132, May.
    11. Egon Franck, 2010. "„Zombierennen“ und „Patenonkel“ - Warum deutsche Fussballklubs in der Champions League den Kürzeren ziehen," Working Papers 0124, University of Zurich, Institute for Strategy and Business Economics (ISU).
    12. Daly, George & Moore, William J, 1981. "Externalities, Property Rights and the Allocation of Resources in Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 77-95, January.
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    More about this item


    sports media; broadcasting; advertising; profitability; pay-TV; free-TV;

    JEL classification:

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


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