Platform Siphoning: Ad-Avoidance and Media Content

Anderson, Simon P.; Gans, Joshua S.

doi:10.2139/ssrn.1428599

Platform Siphoning: Ad-Avoidance and Media Content

44 Pages Posted: 2 Jul 2009 Last revised: 17 Mar 2011

See all articles by Simon P. Anderson

Simon P. Anderson

University of Virginia - Department of Economics

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

There are 2 versions of this paper

Date Written: March 16, 2011

Abstract

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.

Keywords: Two-sided markets, advertising-finance, media economics, siphoning, bypass, death spiral

JEL Classification: L82, L86, M37

Suggested Citation: Suggested Citation

Anderson, Simon P. and Gans, Joshua S., Platform Siphoning: Ad-Avoidance and Media Content (March 16, 2011). Available at SSRN: https://ssrn.com/abstract=1428599 or http://dx.doi.org/10.2139/ssrn.1428599