Intermediaries in Two-Sided Markets: An Empirical Analysis of the US Cable Television Industry
- (pp. 256-82)
Abstract
Local television stations are platforms in a two-sided market connecting advertisers and viewers. This paper explicitly examines the effect that important intermediaries (such as cable, telephone, and satellite distributors) may have on a platform's pricing behavior in a two-sided market. I find that stations raise their fees to cable distributors because stations prefer that viewers access their content through satellite distributors with whom they do not compete in the local advertising market, and that station mergers lower stations' fees to distributors by partially internalizing a pricing externality that results from the mandatory bundling of local content. (JEL C78, D12, G34, L11, L82, M37)Citation
Boik, Andre. 2016. "Intermediaries in Two-Sided Markets: An Empirical Analysis of the US Cable Television Industry." American Economic Journal: Microeconomics, 8 (1): 256-82. DOI: 10.1257/mic.20140167Additional Materials
JEL Classification
- C78 Bargaining Theory; Matching Theory
- D12 Consumer Economics: Empirical Analysis
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L82 Entertainment; Media
- M37 Advertising
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