Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 01/2005: Financing of Media Firms: Does Competition Matter?

Hans Jarle Kind (), Tore Nilssen () and Lars Sørgard ()
Additional contact information
Hans Jarle Kind: Norwegian School of Economics and Business Administration, Postal: NHH, Helleveien 30, NO-5045 Bergen, Norway
Tore Nilssen: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Lars Sørgard: Norwegian Competition Authority, Postal: P.O.Box 8132 Dep, 0033 Oslo, Norway

Abstract: This paper analyses how competition between media firms influences the way they are financed. In a setting where monopoly media firms choose to be completely financed by consumer payments, competition may lead the media firms to be financed by advertising as well. The closer substitutes the media firms’ products are, the less they rely on consumer payment and the more they rely on advertising revenues. If media firms can invest in programming, they invest more the less differentiated the media products are perceived to be.

Keywords: Media; Advertising; Two-sided markets

JEL-codes: L22; L82; L86; M37

22 pages, April 6, 2005

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Published as
Hans Jarle Kind, Tore Nilssen and Lars Sørgard, (2009), '"Business Models for Media Firms: Does Competition Matter for How They Raise Revenue?"', Marketing Science, vol 28, pages 1112-1128

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