Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, May 3, 2012

TV Wars: Exclusive Content and Platform Competition in Pay TV

Posted by D. Daniel Sokol

Helen Weeds (Essex) has written on TV Wars: Exclusive Content and Platform Competition in Pay TV.

ABSTRACT: The paper examines incentives for exclusive distribution of premium television content such as live sports and Hollywood movies. Static analysis shows that a pay TV operator with premium content always chooses to supply its retail rival, using per-subscriber fees to soften competition. Incorporating platform competition, however, exclusive content gives its holder a market share advantage that is amplified by dynamic effects. Under some conditions this benefit outweighs the opportunity cost of forgone wholesale fees, making exclusivity the equilibrium choice. The analysis explains the observed incidence of content exclusivity in pay TV. Specific dynamic mechanisms are explored, and welfare and policy implications are discussed.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/05/tv-wars-exclusive-content-and-platform-competition-in-pay-tv-.html

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