Entry Deterrence and Multidimentional Competition in the Satellite Pay-TV Market
This model analyses competition in the satellite pay-TV market. Duopolistic firms commit to offer TV programmes to attract subscribers to their broadcasting platforms. However, under certain cost conditions, a first mover advantage acquired in programmes can result in the monopolisation of the pay-TV market, due to network effects. Welfare analysis shows that consumers are better off with duopoly, particularly with symmetric duopoly. Total welfare can be higher under monopoly, but only in the region where the fixed costs of the TV programmes are low. Moreover, the model suggests that a more balanced (ideally, symmetric) duopoly, promoted with the antitrust intervention, would improve total welfare, with respect to the asymmetric duopoly that would affirm spontaneously. This model offers an analytical benchmark for some recent antitrust cases, where antitrust authorities have chosen to limit the accumulation of broadcasting rights as a mean to prevent the monopolization of the pay-TV market. In particular, our results support and even reinforce the rationale of the antitrust decisions adopted on the case of the proposed merger/acquisition between Telepiu' and Stream in Italy.
|Date of creation:||Jul 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39 071 220 7100
Fax: +39 071 220 7102
Web page: http://www.dises.univpm.it/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:anc:wpaper:187. 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: (Maurizio Mariotti)
If references are entirely missing, you can add them using this form.