by advertising as well. The closer substitutes the media firms’ products are, the less they rely on consumer payment and … the more they rely on advertising revenues. If media firms can invest in programming, they invest more the less …

We consider a model where TV channels transmit advertising, and viewers dislike such commercials. We find that the less … differentiated the TV channels’ programs are, the lower is the amount of advertising in equilibrium. Relative to the social optimum …, there is underprovision of advertising if TV channels are sufficiently close substitutes. In such a situation, a merger …

Under the current market structure in the TV industry advertising prices are typically set by TV channels while viewer … the willingness to pay for rival channels. We find that a shift to a market structure where advertising prices as well as …