Content and Advertising in the Media: Pay-TV versus Free-To-Air

Tommaso Valletti and Martin Peitz

No 4771, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We compare the advertising intensity and content of programming in a market with competing media platforms. With pay-tv media platforms have two sources of revenues, advertising revenues and revenues from viewers. With free-to-air media platforms receive all revenues from advertising. We show that if viewers strongly dislike advertising, the advertising intensity is greater under free-to-air television. We also show that free-to-air television tends to provide more similar content whereas pay-tv stations differentiate their content. In addition, we compare the welfare properties of the two different schemes.

Keywords: Advertising; Media; Product differentiation; Two-sided markets (search for similar items in EconPapers)
JEL-codes: D43 L13 L82 (search for similar items in EconPapers)
Date: 2004-12
New Economics Papers: this item is included in nep-com and nep-mic
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Citations: View citations in EconPapers (51)

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Journal Article: Content and advertising in the media: Pay-tv versus free-to-air (2008)
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