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TV-Broadcasting Competition and Advertising

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Firms operating in the television industry lie at the interface between two markets. In the first one, they sell their audience and part of their broad- casting time to advertising companies (the advertising market). In the second they compete for increasing the size of their audiences by proposing attrac- tive program-mixes to TV-viewers (the audience market). Two major links make these markets tightly interrelated. First, the larger the audience of a particular TV-channel, the more attractive this channel as a media support for the advertisers, and the higher their willingness to pay for having ad-spots inserted in its program. This simply reflects the fact that the impact of...

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