Handbook of Media Economics, vol 1A

RaðÞ¼av aðÞ:

Assume that the corresponding marginal revenue R

0

(a) slopes down in standard fashion.

2.2.3 Media Platforms

Media platforms are assumed to maximize their profits. Abstracting for the moment from

costs (and therefore quality) of providing programming, then under pure advertising

finance (so s

i

¼0 for all i), profit is π

i

¼P

i

a

i

with P

i

the price of an ad on platform i. With

mixed finance, profit is π

i

¼P

i

a

i

+ s

i

N

i

. We unpack these profit functions and draw out

tractable ways to deal with them in oligopolistic platform competition in the next section.

2.2.4 Other Players

To be sure, there are many other agents interacting in the production of the final product

(such as ad agencies, content producers like journalists and program producers, cable ...