Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/29560
Authors: 
Stuehmeier, Torben
Wenzel, Tobias
Year of Publication: 
2009
Series/Report no.: 
IWQW discussion paper series 10/2009
Abstract: 
This paper studies the impact of ad-avoidance behavior in media markets. We consider a situation where viewers can avoid advertisement messages. As the media market is a two-sided market, increased ad-avoidance reduces advertisers' value of placing an ad. We contrast two financing regimes, free-to-air and pay-TV. We find that increased avoidance opportunities decrease profits and entry in the free-to-air regime. In contrast, in the pay-TV regime, lower income from advertisements are compensated by higher subscription income leaving profits and the number of channels unaflected. Bypassing advertising messages affects welfare ambiguously.
Subjects: 
Media Markets
Two-Sided Markets
Ad-avoidance
JEL: 
L11
L13
Document Type: 
Working Paper

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