Profit Sharing in a Closed Content Market

Jungsuk Oh

Journal of Media Economics, 2007, vol. 20, issue 1, 55-75

Abstract: Many media industries can be characterized as a closed content market in which only subscribers of the distribution network operator (Network Provider [NP]) have access to the content provided by a content provider (CP). In these markets, the NP frequently charges the CP for providing billing and connectivity services to potential customers. Due to this carriage payment, the closed content market has structural similarity to the coalitional form game. Consequently, concepts of superadditivity, the core, and the Shapley value can be applied to determine what constitutes a sustainable and fair share of the CP's profit that could be paid to the NP as a carriage payment. This article addresses issues concerning the existence of the sustainable and fair profit allocation in a closed content market like the one described previously.

Date: 2007
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DOI: 10.1080/08997760709337019

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