IDEAS home Printed from
   My bibliography  Save this article

Ad Pricing by Multi-Channel Platforms: How to Make Viewers and Advertisers Prefer the Same Channel?


  • Øystein Foros
  • Hans Jarle Kind
  • Guttorm Schjelderup


Ad-financed TV channels are two-sided platforms where media houses provide communication from advertisers to viewers. Most media houses air several channels, some of which are particularly valuable to advertisers. At first glance, one might expect the ad volumes to be highest for the channels that are the advertisers' favorites. However, a crucial management challenge for media houses is to ensure that viewers go where the potential for raising advertising revenue is greatest. Because viewers dislike ads, we show that this implies that advertising volumes will be relatively low (and advertising prices relatively high) in such channels. Indeed, other things equal, the ad volume in a channel is inversely related to its attractiveness to the advertising market. Only if the costs of using alternative tools to attract viewers to the advertisers' favorite channels are sufficiently small will the advertising volume in channels with high demand for ads be larger than in channels with low demand for ads.

Suggested Citation

  • Øystein Foros & Hans Jarle Kind & Guttorm Schjelderup, 2012. "Ad Pricing by Multi-Channel Platforms: How to Make Viewers and Advertisers Prefer the Same Channel?," Journal of Media Economics, Taylor & Francis Journals, vol. 25(3), pages 133-146, September.
  • Handle: RePEc:taf:jmedec:v:25:y:2012:i:3:p:133-146 DOI: 10.1080/08997764.2012.700975

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. De Vany, Arthur & Walls, W David, 1996. "Bose-Einstein Dynamics and Adaptive Contracting in the Motion Picture Industry," Economic Journal, Royal Economic Society, vol. 106(439), pages 1493-1514, November.
    2. De Vany, Arthur S & Walls, W David, 1997. "The Market for Motion Pictures: Rank, Revenue, and Survival," Economic Inquiry, Western Economic Association International, vol. 35(4), pages 783-797, October.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jmedec:v:25:y:2012:i:3:p:133-146. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.