TV Wars: Exclusive Content and Platform Competition in Pay TV

37 Pages Posted: 31 Jan 2012

See all articles by Helen Weeds

Helen Weeds

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: January 2012

Abstract

The paper examines incentives for exclusive distribution of premium television content such as live sports and Hollywood movies. Static analysis shows that a pay TV operator with premium content always chooses to supply its retail rival, using per-subscriber fees to soften competition. Incorporating platform competition, however, exclusive content gives its holder a market share advantage that is amplified by dynamic effects. Under some conditions this benefit outweighs the opportunity cost of forgone wholesale fees, making exclusivity the equilibrium choice. The analysis explains the observed incidence of content exclusivity in pay TV. Specific dynamic mechanisms are explored, and welfare and policy implications are discussed.

Keywords: exclusivity, foreclosure, pay TV

JEL Classification: D43, L13, L41, L82

Suggested Citation

Weeds, Helen F., TV Wars: Exclusive Content and Platform Competition in Pay TV (January 2012). CEPR Discussion Paper No. DP8781. Available at SSRN: https://ssrn.com/abstract=1995964

Helen F. Weeds (Contact Author)

affiliation not provided to SSRN

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