Platform Siphoning: Ad-Avoidance and Media Content
50 Pages Posted: 17 Mar 2010
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Platform Siphoning: Ad-Avoidance and Media Content
Date Written: March 2010
Abstract
Content providers rely on advertisers to pay for content. TiVo, remote controls, and pop-up ad blockers are examples of ad-avoidance technologies that allow consumers to view content without ads, and thereby siphon off the content without paying the price. We examine the content providers' reaction to such technologies, demonstrating that their adoption increases advertising clutter (leading to a potential downward spiral), may reduce total welfare and content quality, and can lead to more mass-market content. We cast doubt on the profitability of using subscriptions to counter the impact of ad-avoidance.
Keywords: ad-avoidance, advertising, bypass, death spiral, media economics, siphoning, Two-sided markets
JEL Classification: L82, L86, M37
Suggested Citation: Suggested Citation