Exclusive Quality - Why Exclusive Distribution May Benefit the TV Viewers

46 Pages Posted: 29 Jun 2007

See all articles by Johan Stennek

Johan Stennek

Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Date Written: January 2007

Abstract

Sports organizations, Hollywood studios and TV channels grant satellite and cable networks exclusive rights to televise their matches, movies and media contents. Exclusive distribution prevents viewers from watching attractive programs, and reduces the TV-distributors incentives to compete in prices. This paper demonstrates that exclusive distribution may also give providers of contents incentives to invest in higher quality and, as a result, force competitors to reduce their prices. Exclusive distribution may benefit all viewers, including those who are excluded.

Keywords: Advertising, bargaining, exclusive contracts, investment, quality, two-sided market

Suggested Citation

Stennek, Johan, Exclusive Quality - Why Exclusive Distribution May Benefit the TV Viewers (January 2007). CEPR Discussion Paper No. 6072, Available at SSRN: https://ssrn.com/abstract=997354

Johan Stennek (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

P.O. Box 5501
S-114 85 Stockholm
Sweden
+46 8 665 4536 (Phone)
+46 8 665 4599 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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