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Why Is Exclusivity in Broadcasting Rights Prevalent and Why Does Simple Regulation Fail?

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  • Martimort, David
  • Pouyet, Jérôme

Abstract

Pay-TV firms compete both downstream to attract viewers and upstream to acquire broadcasting rights. Because profits inherited from downstream competition satisfy a convexity property, allocating rights to the dominant firm maximizes the industry profit. Such an exclusive allocation of rights emerges as a robust equilibrium outcome but may fail to maximize welfare. We analyze whether a ban on resale and a ban on package bidding may improve welfare. These corrective policies have no impact on the final allocation but lead to profit redistribution along the value chain.

Suggested Citation

  • Martimort, David & Pouyet, Jérôme, 2024. "Why Is Exclusivity in Broadcasting Rights Prevalent and Why Does Simple Regulation Fail?," TSE Working Papers 24-1501, Toulouse School of Economics (TSE), revised Jul 2024.
    • Handle: RePEc:tse:wpaper:129026
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    References listed on IDEAS

    as
    1. Pierre Dubois & Morten Sæthre, 2020. "On the Effect of Parallel Trade on Manufacturers' and Retailers' Profits in the Pharmaceutical Sector," Econometrica, Econometric Society, vol. 88(6), pages 2503-2545, November.
    2. Martimort, David & Stole, Lars, 2012. "Representing equilibrium aggregates in aggregate games with applications to common agency," Games and Economic Behavior, Elsevier, vol. 76(2), pages 753-772.
    3. Jorge Aseff & Hector Chade, 2008. "An optimal auction with identity‐dependent externalities," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 731-746, September.
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    More about this item

    Keywords

    Broadcasting rights; Upstream and downstream competition; Exclusivity;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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