TV on mobility: a two-sided market analysis

Marc Ivaldi and Estelle Malavolti (estelle.malavolti@enac.fr)
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Estelle Malavolti: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, LEEA - ENAC - Laboratoire d'Economie et d'Econométrie de l'Aérien - ENAC - Ecole Nationale de l'Aviation Civile

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Abstract: The opportunity to watch TV on a mobile phone is taking more and more importance as mobile operators are investing in new technologies allowing a better quality of the broadcasting. According to US consultants of Visiongain, 270 Millions of new subscribers, which represents 10% of the mobile users, are expected by 2009. This paper analyzes how the market of the TV on mobile phone works. We model this market as a two-sided market, where the customers from one side of the market, wants to watch TV on their mobile, and, TV producers/advertisers, on the other side of the market, want to advertise on a new media. Customers and advertisers are not directly related : The mobile operator plays the role of a platform connecting the two sides of the market. With respect to the classical TV market (TV at home), this market is larger: Customers can consume TV on their mobile while in mobility. This feature translates in concrete terms to the fact that consumers are willing to pay more to receive the TV on their mobile. It means as well that the advertisers are willing to pay more to acquire advertising space because the audience is larger.

Date: 2006-04-07
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Published in IIOC 2006, International Industrial Organization Conference, Apr 2006, Boston, United States. pp xxxx

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