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Programming and Advertising Competition in the Broadcasting Industry (2004)

Gabszewicz, Jean J. ; Laussel, Didier ; Sonnac, Nathalie

350 Main Street , Malden , MA 02148 , USA , and PO Box 1354, 9600 Garsington Road , Oxford OX4 2XG , UK . : Blackwell Publishing, Inc.

Journal of economics & management strategy 13 (2004), S. 0

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ISSN: 1530-9134

Source: Blackwell Publishing Journal Backfiles 1879-2005

Topics: Economics

Notes: We analyze competition between two private television channels that derive their profits from advertising receipts. These profits are shown to be proportional to total population advertising attendance. The channels play a sequential game in which they first select their profiles (program mixes) and then their advertising ratios. We show that these ratios play the same role as prices in usual horizontal differentiation models. We prove that whenever ads' interruptions are costly for viewers the program mixes of the channels never converge but that the niche strategies are less effective and that the channel “profiles” are closer as advertising aversion becomes stronger.

Type of Medium: Electronic Resource

URL: http://dx.doi.org/10.1111/j.1430-9134.2004.00027.x

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