Two-Sided Market Competition in Television Industry – The Way Forward in India

Mahuya Chakrabarti, RANAJIT CHAKRABARTY

Abstract


This study considers a duopoly model of quantity competition with differentiated products in a two-sided television market where both viewing and advertising prices are optimally decided by TV channels and the distribution platform is digital and addressable. In the backdrop of mandatory implementation of digital addressable system of cable networks by 2014, as prescribed by TRAI, this model is applicable in the Indian context. In this short run model, viewers’ tastes for content and advertisement, advertisers’ preference for advertising medium and programme production cost are assumed to remain unchanged. It is observed that, increased product differentiation may or may not be profitable to the TV channels when they have almost similar intrinsic values to the viewers and with unequal intrinsic values of the channels to the viewers, low product differentiation will make the platform a monopoly platform endogenously.

 


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ISSN : 2251-1555