 Ad Pricing by Multi-Channel Platforms: How to Make Viewers and Advertisers Prefer the Same Channel?Øystein Foros, Hans Jarle Kind and Guttorm Schjelderup Journal of Media Economics, 2012, vol. 25, issue 3, 133-146 Abstract: 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. Date: 2012 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:jmedec:v:25:y:2012:i:3:p:133-146 Ordering information: This journal article can be ordered from DOI: 10.1080/08997764.2012.700975 Access Statistics for this article Journal of Media Economics is currently edited by Nodir Adilov More articles in Journal of Media Economics from Taylor & Francis Journals |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.