The Television Industry: The interplay between products, advertising, and programme quality

The purpose of this report is to examine the rivalry within the product and the TV market, respectively, and how those two markets interact through the market for advertising on TV. After a brief introduction where we describe some characteristics for the TV industry, we elaborate on two different theoretical models. One of them focuses on the TV market, while the other one focuses on the product market. Both models are extended to capture the interaction between the TV market and the product market. Finally, we discuss briefly some of the potential market failures in the TV industry and the role of public policy.