Television Programming, Monopolistic Competition, and Welfare

Spence, Michael; Owen, Bruce M.

doi:10.2307/1883140

Cited by 232 publications

(116 citation statements)

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“…Their results are akin to our mixed model in that the monopoly will lower the subscription price as the willingness to pay of the advertisers increases. Several studies (e.g., Steiner 1952;Beebe 1977;Spence and Owen 1977;Doyle 1998;Gal-Or and Dukes 2003;Bourreau 2003;Gabszewicz et al 2006;Peitz and Valletti 2008) look at the product positioning of ad-sponsored firms. In general, they find that with advertising, firms tend to provide less horizontally-differentiated products.…”

Section: Related Literaturementioning

confidence: 99%

Strategies to Fight Ad-Sponsored Rivals

2010

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We analyze the optimal strategy of a high-quality incumbent that faces a low-quality ad-sponsored competitor. In addition to competing through adjustments of tactical variables such as price or the number of ads a product carries, we allow the incumbent to consider changes in its business model. We consider four alternative business models, a subscription-based model, an ad-sponsored model, a mixed model in which the incumbent offers a product that is both subscription-based and ad-sponsored, and a dual model in which the incumbent offers two products, one based on the ad-sponsored model and the other based on the mixed business model. We show that the optimal response to an ad-sponsored rival often entails business model reconfigurations. We also find that when there is an ad-sponsored entrant, the incumbent is more likely to prefer to compete through the subscription-based or the ad-sponsored model, rather than the mixed or the dual model, because of cannibalization and endogenous vertical differentiation concerns. We discuss how our study helps improve our understanding of notions of strategy, business model, and tactics in the field of strategy.

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Section: Related Literaturementioning

confidence: 99%

Strategies to Fight Ad-Sponsored Rivals

2010

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“…4 An early attempt to do so is in Spence and Owen (1977). However, in their discussion of advertising-financed TV vs. pay TV, the presence of advertising is assumed to have no effect on viewers.…”

Section: Introductionmentioning

confidence: 99%

Competition for Viewers and Advertisers in a TV Oligopoly

Kind

Nilssen

Sørgard³

2007

Journal of Media Economics

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© Dette eksemplar er fremstilt etter avtale med KOPINOR, Stenergate 1, 0050 Oslo. Ytterligere eksemplarfremstilling uten avtale og i strid med åndsverkloven er straffbart og kan medføre erstatningsansvar. CASE -CENTRE FOR ADVANCED STUDIES IN ECONOMICSCASE -Centre for Advanced Studies in Economics -is a joint centre for The Norwegian School of Economics and Business Administration (NHH), The Institute for Research in Economics and Business Administration (SNF) and The University of Bergen (UiB). Research at CASE includes all types of issues based on economic theory and method, and researchers at the Centre have particular expertise within the areas of international trade, industrial economics, labour market economics, factor mobility, economic integration, industrial policy, international macro economics, tax policy, international transport and maritime research. International Trade and Tax PolicyResearch within this area focuses mainly on issues related to international trade and tax policy, and has generally been dominated by projects aiming to provide increased insight into global structural issues and the effect of regional economic integration. The staff have particular expertise within the fields of international real economics (trade, factor mobility, economic integration and industrial policy), international macro economics and international tax policy, but are also actively involved in projects relating to public economics and industrial policy. Industrial EconomicsIndustrial economics is another central research area at the Centre, within which SNF has longstanding traditions. A series of individual studies have been carried out through large framework programmes funded by the Research Council of Norway and major Norwegian companies. The focal point of these studies is strategic company behaviour in industries with few players, where competition effects are modelled and analysed. The studies have provided important structural and empirical insights into deregulation effects within industries such as airlines, telecommunications and energy and have provided significant input to Norwegian competition policies. The research group includes a number of researchers at both UiB and NHH and has an extensive international network. Labour Market EconomicsThe labour market group focuses on mainly two research areas. One central topic is education and family economics. An important aspect is to analyse the production process for human capital; the importance of family, neighbourhood, preschools and schools for adult education and labour market experience. The other main topic is to analyse firm performance and firm restructuring. These analyses include firm performance, adjustment costs, costs of displacement including health costs, the effect of technological change and international trade, and analysis of organisational change. Human ResourcesCASE is a network-based organisation whose staff consists mainly of professors at Department of Economics at NHH and UiB as well as leading international economists who are ...

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“…Bundling is combining goods and selling the package for one price. 29 For an elaboration, see Spence and Owen (1977). 30 The next section discusses imperfections in consumer valuation in greater detail.…”

Section: Pay Tvmentioning

confidence: 99%

Does Public Service Broadcasting Serve The Public? The Future of Television in the Changing Media Landscape

2006

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The media landscape is subject to substantial technological change. In this Discussion Paper we analyse how technological trends affect the economic rationale for PSB. After identifying the aims and nature of PSB, we derive eight possible market failures from the specific economic characteristics of information. The changing relevance of these market failures is subsequently discussed in the light of the technological changes. Based on this analysis, we argue that public service broadcasting (PSB) for the digital age should be light in the sense that it has a much smaller mandate. The main reason for this conclusion is that, due to technological developments, many market failures in the broadcasting industry are no longer relevant. The broadcasting market thus functions more and more like a normal market. This implies that the allocation tends to the efficient outcome, as long as consumer valuation is properly accounted for. This is not the case when there are externalities and possibly not when it comes to valuing quality. In the presence of these market failures, an efficient allocation is not warranted in the broadcasting industry. It is these remaining market failures that give a future PSB a right to exist.

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Television Programming, Monopolistic Competition, and Welfare

Cited by 232 publications

References 1 publication

Strategies to Fight Ad-Sponsored Rivals

Strategies to Fight Ad-Sponsored Rivals

Competition for Viewers and Advertisers in a TV Oligopoly

Does Public Service Broadcasting Serve The Public? The Future of Television in the Changing Media Landscape

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