Competition for Advertisers and for Viewers in Media Markets

Simon Anderson, Øystein Foros and Hans Jarle Kind

Economic Journal, 2018, vol. 128, issue 608, 34-54

Abstract: Standard models of advertising†financed media assume consumers patronise a single†media platform, precluding effective competition for advertisers. Such competition ensues if consumers multi†home. The principle of incremental pricing implies that multi†homing consumers are less valuable to platforms. Then entry of new platforms decreases advertisement prices, while a merger increases them, and advertisement†financed platforms may suffer if a public broadcaster carries advertisements. Platforms may bias content against multi†homing consumers, especially if consumers highly value overlapping content and/or second impressions have low value.

Date: 2018
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https://doi.org/10.1111/ecoj.12428

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Working Paper: Competition for advertisers and for viewers in media markets (2015)
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