City Research Online

Abstract

Television (TV) stations forego millions of dollars of advertising revenues by airing tune-ins (preview advertisements) for their upcoming programs. In this paper, I analyze the equilibrium as well as welfare properties of tune-ins in a duopolistic TV market that lasts for two periods. Importantly, each TV station is fully informed about its own as well as its rival's program. Viewers receive information via tune-ins, if any, or alternatively by sampling a program for a few minutes (and switching across stations). I find that equilibrium tune-in decisions do not necessarily depend on TV stations' knowledge of their rival's program. In this case, the opportunity costs of tune-ins could be so high that a regime without any tune-ins may be socially better. However, when tune-ins depend on both of the upcoming programs, it is possible that they enhance welfare by helping viewers avoid some of the inefficient program sampling they would otherwise do in a regime without any tune-ins.

Publication Type:	Article
Additional Information:	© Elsevier 2016. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Publisher Keywords:	Informative advertising, Information disclosure, Tune-ins, Sampling
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HM Sociology P Language and Literature > PN Literature (General) > PN1990 Broadcasting
Departments:	School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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