The quantities of advertising on TV are regulated in France, as in many other developed countries. This paper aims at understanding the welfare implication of such regulation. It is the rst paper which investigates this issue with a structural econometric model in two-sided market framework. I construct an unique database of per hour data on 12 main broadcast TV stations in France during one year (2014) to estimate structurally the demand and supply in the French broadcast television industry. I identify the shadow prices of regulation caps on advertising quantities, using the dierence in estimated marginal costs between the binding and non-binding regulation constraints. A counterfactual experiment is carried out to quantify the exact impact of regulation. The results suggest that the TV channels advertise more without regulation but the overall impact of the current regulatory regime is small. The welfare analysis suggests that the current regulation framework is unnecessary, since it constrained the prot of TV channels without improving signicantly the welfare of TV viewers.

The empirical analysis of media platforms economics has often neglected the multi-homing behaviour of advertisers. Assuming away the cross-substitutability and/or complementarity between the advertising slots of dierent platforms could damage the quality and the robustness of counterfactual analysis. To evaluate the consequence of such an abstraction, we compare the simulation results of hypothetical platform mergers when the demand on the advertising side is derived from a Translog cost model which allows for multi-homing, and when it is approximated by using a simple log-linear inverse demand model that ignores the dierentiation among media platforms' advertising slots. Ignoring the existence of substitutes or complements on the advertising side would result in overpredicting the losses of the viewers' surplus and in underpredicting the gains in platforms' revenues.

This paper empirically investigates the advertising competition in the French broadcast television industry within a two-sided market framework. We use a unique dataset on the French broadcast television market including audience, prices, and quantities of advertising of twentyone TV channels from March 2008 to December 2013. We specify a structural model of oligopoly competition and identify the shape and magnitude of the feedback loop between TV viewers and advertisers. We also implement a simple procedure to identify the conduct of firms on the market. We find that the nature of competition in the French TV advertising market is of the Cournot type. Further, we provide empirical evidence that the price-cost margin is not a good indicator of the market power of firms operating on two-sided markets. Finally, we provide a competition analysis. The counterfactual simulation suggests that the merger of advertising sales houses would not have significantly affected the equilibrium outcomes in this industry because of the strong network externalities between TV viewers and advertisers. These results provide a critical evaluation of the 2010 decision of the French competition authority to authorize the acquisition of two broadcast TV channels by a large media group under behavioral remedies.