The Economics of Television and Online Video Markets

Abstract

Television is the dominant entertainment medium for hundreds of millions. This chapter surveys the economic forces that determine the production and consumption of this content. It presents recent trends in television and online video markets, both in the US and internationally, and describes the state of theoretical and empirical research on these industries. A number of distinct themes emerge, including the growing importance of the pay-television sector, the role played by content providers (channels), distributors, and negotiations between them in determining market outcomes, and concerns about the effects of market power throughout this vertical structure. It also covers important but unsettled topics including the purpose for and effects of both the old (Public Service Broadcasters) and the new (online video markets). Open theoretical and empirical research questions are highlighted throughout.

Keywords: advertising, bargaining, bundling, economics, foreclosure, market power, net neutrality, online video, pay television, public service broadcasting, television

JEL Classification: C72, D40, L32, L40, L50, L82, L86, M37