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American Economic Journal: Microeconomics: Vol. 3 No. 4 (November 2011)

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Platform Siphoning: Ad-Avoidance and Media Content

Article Citation

Anderson, Simon P., and Joshua S. Gans. 2011. "Platform Siphoning: Ad-Avoidance and Media Content." American Economic Journal: Microeconomics, 3(4): 1-34.

DOI: 10.1257/mic.3.4.1

Abstract

Content providers rely on advertisers to pay for content. TiVo, remote controls, and pop-up ad blockers are examples of ad-avoidance technologies that allow consumers to view content without ads, and thereby siphon off the content without paying the "price." We examine the content provider's reaction to such technologies, demonstrating that their adoption increases advertising clutter (leading to a potential downward spiral), may reduce total welfare and content quality, and can lead to more mass-market content. We cast doubt on the profitability of using subscriptions to counter the impact of ad-avoidance. (JEL L82, L86, M37)

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Authors

Anderson, Simon P. (U VA)
Gans, Joshua S. (U Toronto)

JEL Classifications

L82: Entertainment; Media
L86: Information and Internet Services; Computer Software
M37: Advertising

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