TV Wars: Exclusive Content and Platform Competition in Pay TV

34 Pages Posted: 28 Jul 2016

See all articles by Helen Weeds

Helen Weeds

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: August 2016

Abstract

The article examines incentives for exclusive distribution of premium television programming. Static analysis shows that a vertically integrated operator with premium programming always supplies this content to the rival distributor, using per‐subscriber fees to soften competition. In a dynamic setting with switching costs exclusivity confers a market share advantage, benefiting the operator in the future. Under certain conditions this future benefit outweighs the opportunity cost of forgone wholesale fees, making exclusivity the preferred choice. Alternative dynamic mechanisms are explored, identifying essential features. The analysis explains the observed incidence of content exclusivity in pay TV and provides guidance for policy makers.

Suggested Citation

Weeds, Helen F., TV Wars: Exclusive Content and Platform Competition in Pay TV (August 2016). The Economic Journal, Vol. 126, Issue 594, pp. 1600-1633, 2016. Available at SSRN: https://ssrn.com/abstract=2815203 or http://dx.doi.org/10.1111/ecoj.12195

Helen F. Weeds (Contact Author)

affiliation not provided to SSRN

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