Advertising and the Distribution of Content

Helen Weeds

No 9079, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines incentives for exclusive distribution of content in the presence of advertising. A monopoly seller of content - such as televisation rights to popular sports - may contract with one or both of two competing distributors, charging lump-sum fees. When distributors are subscription-funded, exclusive sale to a single buyer is the seller's profit-maximising choice, even when distributors also sell advertising airtime. When distributors are purely advertising-funded, however, non-exclusive contracting may instead be preferred. Advertising revenues accruing directly to the content provider may also generate a preference for non-exclusivity even when selling to subscription-funded distributors. The analysis has implications for the distribution of content to pay TV and free-to-air broadcasters, and for internet distribution of content.

Keywords: Advertising; Broadcasting; Exclusivity; Internet (search for similar items in EconPapers)
JEL-codes: D43 L14 L82 M37 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-mkt
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Citations: View citations in EconPapers (2)

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