Media competition

An upstream content creator decides whether to sell their content exclusively to one, or to both, downstream media platforms which compete for consumers. The platforms can choose to price low and attract multihoming among the consumers, or price high and induce singlehoming consumers, i.e. exclusive consumers. We study how the content creator’s pricing strategy can shape consumer homing decisions.

Conventional assumptions in the classical linear city of Hotelling, the workhorse model in media economics, are (i) that no consumer buys more than one of the goods (they are singlehomers) and (ii) that the market is covered. We relax both assumptions to analyze how exclusive and non-exclusive content affect pricing and profit for media platforms. In contrast to the outcome in a covered market with consumer multihoming, we show that the consumer price in an uncovered market depends on both exclusive and non-exclusive content. If advertisers have a high willingness to pay for exclusive eyeballs, platforms prefer to provide non-exclusive rather than exclusive content.

Midway evaluation and seminar presentation for the department.

Master thesis