2004
DOI: 10.1111/j.1430-9134.2004.00027.x
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Programming and Advertising Competition in the Broadcasting Industry

Abstract: We analyze competition between two private television channels that derive their profits from advertising receipts. These profits are shown to be proportional to total population advertising attendance. The channels play a sequential game in which they first select their profiles (program mixes) and then their advertising ratios. We show that these ratios play the same role as prices in usual horizontal differentiation models. We prove that whenever ads' interruptions are costly for viewers the program mixes o… Show more

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Cited by 145 publications
(107 citation statements)
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“…The weights are generated from the share of the respective advertisements in the total number of advertisements for each magazine 13 Previous research has shown that advertising profits or prices are directly proportional to the size of the audience. See, for example, Gabszewicz et al (2004). Empirical studies commonly model advertising rates per subscriber; see Rysman (2004).…”
Section: Regression Specificationmentioning
confidence: 99%
See 1 more Smart Citation
“…The weights are generated from the share of the respective advertisements in the total number of advertisements for each magazine 13 Previous research has shown that advertising profits or prices are directly proportional to the size of the audience. See, for example, Gabszewicz et al (2004). Empirical studies commonly model advertising rates per subscriber; see Rysman (2004).…”
Section: Regression Specificationmentioning
confidence: 99%
“…Magazine readership in the US has grown by 4.3% in the past five years, while newspaper circulation has declined by more than 10% over the same period. 9 We argue that the relative success of the magazine industry, especially compared with print newspapers, can be attributed in part to the greater scope for targeted advertising in magazines.…”
mentioning
confidence: 99%
“…In recent analyses of the media market, such as Gal-Or and Dukes (2003), Gabszewicz, et al (2004), Anderson and Gabszewicz (2005), and Peitz and Valletti (2005), viewers are located along a Hotelling (1929) line, varying according to their preferences for TV-program content, and TV channels choose positions on that line.…”
Section: Introductionmentioning
confidence: 99%
“…Technically, an increase in their parameter implies both that the products become less di¤erentiated and that the size of the market falls. 12 Note that equation (14) yields…”
Section: The Role Of Product Di¤erentiationmentioning
confidence: 99%