Advertising and the Distribution of Content

21 Pages Posted: 28 Sep 2012

See all articles by Helen Weeds

Helen Weeds

affiliation not provided to SSRN

Date Written: August 2012

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

JEL Classification: D43, L14, L82, M37

Suggested Citation

Weeds, Helen F., Advertising and the Distribution of Content (August 2012). CEPR Discussion Paper No. DP9079. Available at SSRN: https://ssrn.com/abstract=2153529

Helen F. Weeds (Contact Author)

affiliation not provided to SSRN

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