TV Wars: Exclusive Content and Platform Competition in Pay TV | Zendy

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TV Wars: Exclusive Content and Platform Competition in Pay TV

Author(s) -

Weeds Helen

Publication year - 2016

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1111/ecoj.12195

Subject(s) - incentive , competition (biology) , business , industrial organization , operator (biology) , vertical integration , distribution (mathematics) , economics , microeconomics , advertising , ecology , mathematical analysis , biochemistry , chemistry , mathematics , repressor , gene , transcription factor , biology

The article examines incentives for exclusive distribution of premium television programming. Static analysis shows that a vertically integrated operator with premium programming always supplies this content to the rival distributor, using per‐subscriber fees to soften competition. In a dynamic setting with switching costs exclusivity confers a market share advantage, benefiting the operator in the future. Under certain conditions this future benefit outweighs the opportunity cost of forgone wholesale fees, making exclusivity the preferred choice. Alternative dynamic mechanisms are explored, identifying essential features. The analysis explains the observed incidence of content exclusivity in pay TV and provides guidance for policy makers.

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