Transcript Revue mensuelle de gestion de marque

Conference on Competition Policy in Two-Sided Markets
Toulouse - June 29/30th - July 1st, 2006
TV on Mobility as a Two-Sided Platform
Marc Ivaldi
University of Toulouse (IDEI), EHESS and CEPR
Estelle Malavolti-Grimal
ENAC and University of Toulouse (GREMAQ)
A new market
● Demand
 1.7 billion mobile subscribers
 Korean market, US market, European markets
 Short duration
 Mobility
 Monthly fee = $ 20 ; price per program = 50 cents
 Higher willingness-to-pay
● Supply
 Type of content
 Classical TV
 Dedicated content (“mobizode”)
 High cost for the tuner ($ 600)
 Technological issues
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Features of the mobile TV market
● Enlarged market
● Two-sided market
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Enlarged Market
● Episodes of mobility
 Larger potential usage wrt to classical TV
● Conclusions
 Better and larger audience of advertising
 Potential profits for the mobile operator
 Higher willingness-to-pay for TV
 Potential profits for the mobile operator
– Customers / consumers accept more advertising
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Telcom Operators
Two-sided
Market
Consumers
Advertising & TV
Operators provide a platform that makes contact between …
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Two-sided Market
● Existence of externalities
 Consumers want to consume TV broadcasts
 Positive externality
 Consumers don’t want to consume advertising
 Negative externality
● Conclusion
 The more advertising, the less TV broadcast
 Arbitrage
 Higher price of ads, higher demand of advertising duration
– Increase of profits on the side of TV broadcasters/channels
BUT
– Decrease of profits on the side of consumers
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Literature
●Two-sided markets
 Rochet-Tirole 04, 03
 Armstrong 02
 Crampes-Haritchabalet-Jullien 04
 Emerging market = the operator is a monopoly
 Impact of mobility
 Anderson-Coate 05
 Welfare analysis
 Two part tariffs
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Market structure
● Agents
 Telecom operator
 Monopoly
 Two-part tariffs
 TV broascasters / Advertisers
 Consommateurs
● A regulator
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Objective
●Instruments: price
●Two questions
 Normative aspects
 What are the optimal level of advertising and broadcasting?
 Positive aspects
 How to implement them?
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Telecom Operator
C = Fixed cost (tuner)
c = Variable costs of broadcasting
Consumers
Advertisers
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Normative aspects: Three different views
● Regulator
 Maximizes welfare
● Wise monopoly
 Maximises profit taking into account the two sides
of the market
● Myopic monopoly
 Maximises profit on each side separately
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The consumer
●n usage of mobile TV en mobilité (minutes)
●m gain per minute from mobility
●p purchase price of one minute of mobile TV
●T subscription
●a quantity of ads (received)
●l social cost of advertising
U  u  n     I  mn  pn  T   la
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The consumer
● Inverse demand function
p n 
u ' n

m
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The myopic monopoly
● Choice of the price of advertising / broadcasting
Max   ra  A sc  a  A and a  a r, n 
r  r(n)
● Choice of the price of the minute of mobile TV
Max   pn  T  cn  C sc U  u and n  n  p 
p such that c  m 
u  n 

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The wise monopoly
● Choice of prices of broadcasting and mobile TV
Max   pn  ra  T  A  cn  C
Uu
et
n  n p
a  A
et
a  a  r, n 
sc
p m
u  n 

u  n  l r n
l a

m

 n

 r a
● Price lower than marginal cost!
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Results on positive aspects
●Analysis
 Wise monopoly / Myopic monopoly
 Two dimensions
 Externality of advertising l
 Sensitivity of advertising demand to audience k
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Results on normative aspects
● The wise monopoly achieves a higher social
welfare than the myopic monopoly
● Analysis
 Regulator / Wise monopoly / Myopic monopoly
 Two dimensions
 Externality of advertising l
 Sensitivity of advertising demand to audience k
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Concluding remarks
● An integrated structure provides higher
profits and welfare than a separated structure
 Role of telecom operators
● Competition policy
 Prices lower than marginal costs
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