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Regulating advertising in the presence of public service broadcasting

  • Stühmeier, Torben
  • Wenzel, Tobias

Television advertising levels in Europe are regulated according to the Audiovisual Service Media Directive where member states of the European Union usually impose stricter regulation on their Public Service Broadcasting (PSB) channels. The present model evaluates the effects of symmetric and asymmetric regulation of ad levels on competition for viewers and advertisers in a duopoly framework where a public and a private broadcaster compete. If both broadcasters face the same advertising cap, regulation can be profit-increasing for both channels. If the public broadcaster is more strictly regulated, this may benefit the commercial rival if higher revenues in the advertising market outweigh the loss in viewership.

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Paper provided by Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf in its series DICE Discussion Papers with number 41.

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Date of creation: 2012
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Handle: RePEc:zbw:dicedp:41
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