Abstract
Pay-TV firms compete both downstream to attract viewers and upstream to acquire broadcasting rights. Because profits inherited from downstream competition satisfy a convexity property, allocating rights to the dominant firm maximizes the industry profit. Such an exclusive allocation of rights emerges as a robust equilibrium outcome but may fail to maximize welfare. We analyze whether a ban on resale and a ban on package bidding may improve welfare. These corrective policies have no impact on the final allocation but lead to profit redistribution along the value chain.
Keywords
Broadcasting rights; Upstream and downstream competition; Exclusivity;
JEL codes
- L13: Oligopoly and Other Imperfect Markets
- L42: Vertical Restraints • Resale Price Maintenance • Quantity Discounts
Reference
David Martimort, and Jérôme Pouyet, “Why Is Exclusivity in Broadcasting Rights Prevalent and Why Does Simple Regulation Fail?”, TSE Working Paper, n. 24-1501, January 2024.
See also
Published in
TSE Working Paper, n. 24-1501, January 2024