Working Paper: CEPR ID: DP6072
Authors: Johan Stennek
Abstract: Sports organizations, Hollywood studios and TV channels grant satellite and cable networks exclusive rights to televise their matches, movies and media contents. Exclusive distribution prevents viewers from watching attractive programs, and reduces the TV-distributors incentives to compete in prices. This paper demonstrates that exclusive distribution may also give providers of contents incentives to invest in higher quality and, as a result, force competitors to reduce their prices. Exclusive distribution may benefit all viewers, including those who are excluded.
Keywords: advertising; bargaining; exclusive contracts; investment; quality; two-sided market
JEL Codes: C78; D43; K21; L42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exclusive distribution (D39) | quality investment by content providers (L82) |
| quality investment by content providers (L82) | prices charged by competitors (L11) |
| exclusive distribution (D39) | prices charged by competitors (L11) |