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Advertising and the Distribution of Content

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  • Weeds, Helen

Abstract

This paper examines incentives for exclusive distribution of content in the presence of advertising. A monopoly seller of content - such as televisation rights to popular sports - may contract with one or both of two competing distributors, charging lump-sum fees. When distributors are subscription-funded, exclusive sale to a single buyer is the seller's profit-maximising choice, even when distributors also sell advertising airtime. When distributors are purely advertising-funded, however, non-exclusive contracting may instead be preferred. Advertising revenues accruing directly to the content provider may also generate a preference for non-exclusivity even when selling to subscription-funded distributors. The analysis has implications for the distribution of content to pay TV and free-to-air broadcasters, and for internet distribution of content.

Suggested Citation

  • Weeds, Helen, 2012. "Advertising and the Distribution of Content," CEPR Discussion Papers 9079, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9079
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    References listed on IDEAS

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    Cited by:

    1. Drouard, Joeffrey, 2022. "Content-distribution strategies in markets with locked-in customers," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    2. Anna D'Annunzio, 2013. "Vertical Integration in Two-Sided Markets: Exclusive Provision and Program Quality," DIAG Technical Reports 2013-16, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".

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    More about this item

    Keywords

    Advertising; Broadcasting; Exclusivity; Internet;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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