Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry

Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry Abstract I examine the effects of vertical integration between programming and distribution in the cable television industry. I assess the effects of ownership structure on program offerings, prices, and subscriptions, and I compare consumer welfare across integrated and unintegrated markets. The results of this analysis suggest two general conclusions. First, integrated operators tend to exclude rival program services, suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators. Second, vertical integration does not harm, and may actually benefit, consumers because of the associated efficiency gains. (JEL L10, L22, L40 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review American Economic Association

Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry

American Economic Review, Volume 91 (3) – Jun 1, 2001

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Publisher
American Economic Association
Copyright
Copyright © 2001 by the American Economic Association
Subject
Articles
ISSN
0002-8282
D.O.I.
10.1257/aer.91.3.428
Publisher site
See Article on Publisher Site

Abstract

Abstract I examine the effects of vertical integration between programming and distribution in the cable television industry. I assess the effects of ownership structure on program offerings, prices, and subscriptions, and I compare consumer welfare across integrated and unintegrated markets. The results of this analysis suggest two general conclusions. First, integrated operators tend to exclude rival program services, suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators. Second, vertical integration does not harm, and may actually benefit, consumers because of the associated efficiency gains. (JEL L10, L22, L40 )

Journal

American Economic ReviewAmerican Economic Association

Published: Jun 1, 2001

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