Platform Siphoning: Ad-Avoidance and Media Content
Simon P. Anderson
University of Virginia - Department of Economics
Joshua S. Gans
University of Toronto - Rotman School of Management; NBER
March 16, 2011
Content providers rely on advertisers to pay for content. TiVo, remote controls, and popup ad blockers are examples of ad-avoidance technologies that allow consumers to view content without ads, and thereby siphon off the content without paying the price.‘ We examine the content provider‘s reaction to such technologies, demonstrating that their adoption increases advertising clutter (leading to a potential downward spiral), may reduce total welfare and content quality, and can lead to more mass-market content. We cast doubt on the profitability of using subscriptions to counter the impact of adavoidance.
Number of Pages in PDF File: 44
Keywords: Two-sided markets, advertising-finance, media economics, siphoning, bypass, death spiral
JEL Classification: L82, L86, M37working papers series
Date posted: July 2, 2009 ; Last revised: March 17, 2011
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