Contracts and Competition in the Pay-Tv Market
LBS, Department of Economics, Working Paper No. DP 2001/5
31 Pages Posted: 7 Nov 2001
Date Written: July 2001
This paper analyses how contractual arrangement for the sale and resale of premium programming effect competition in the pay-TV market. Competition is less effective when resale contracts specify per-subscriber fees rather than lump-sum payments. When premium programming is sold at terms similar to those observed in the UK, consumers can be made worse off than in the absence of premium programming. A number of potential remedies are considered. A ban on exclusive vertical contracts would intensify downstream competition and transfer the benefits of premium programming to consumers.
Keywords: Pay TV, contracts
JEL Classification: L13, L41, L96
Suggested Citation: Suggested Citation