Nathalie Sonnac

Press advertising and the ascent of the 'Pensée Unique'

The press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts. We show that this induces the editors of newspapers to moderate, in several cases, the political message they display to their readers, compared with the political opinions they would have expressed otherwise. To this end, we consider a three-stage game in which editors select sequentially their political image, the price of their newspaper and the advertising tariff they oppose to the advertisers. The intuition of the result lies in the fact that editors have to sell tasteless political messages to their readers in order to sell a larger audience to the advertisers.

Press Advertising and the Political Differentiation of Newspapers

The press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts. We show that this may induce the editors of the newspapers to moderate the political message they display to their readers, compared with the political opinions they would have expressed otherwise.

On price competition with complementary goods

We consider a duopoly industry with two separate firms each selling an indivisible product. The joint consumption of these goods has a specific value for the consumers which exceeds the mere addition of utilities when products are consumed in isolation : the higher this excess, the larger the complementarity between the goods. We analyse price equilibria in this market as related to the degree of complementarity existing between the two products.

Competition In The Media And Advertising Markets

We examine how media competition is affected when making endogenous advertising rates. To this end, we revisit some well-known contributions in which advertising rates and volumes are viewed as exogenous, so that the effects of advertising on diversity and industry concentration only depend on the size of the audience, without taking into account how the media audience depends itself on advertising rates. We rely on the two-sided market structure which characterizes the media and advertising industry and allows advertising rates and audience size to be jointly determined at equilibrium. Finally, we study how making the advertising rate dependent on the audience size may influence the content and diversity of the media industry.

Advertising and the rise of the free daily newspapers

We analyze the competition between two newspapers in a vertical differentiation model where the qualities of the journals are determined endogenously in the first stage of the game. We show that when the advertising revenues per reader increase there is a critical value above which the quality of the low quality newspaper discontinuously falls while it becomes similtaneously a free newspaper. This is beneficial to the high quality journal and detrimental to the readers.

Media as multi-sided platforms

Media are among the most influential institutions in modern societies. Media outlets – press, TV, Internet, radio, cinema – have become the leading players in the production and diffusion of information.1 Universal access to information, knowledge and pluralism of opinions are fundamental vectors for promoting a democratic and free society. However, the production of information is costly and the survival of media outlets crucially depends on the possibility of financing their activities. To avoid overloading consumers with all the costs of information production and promote as much as possible a universal access to information, media outlets have long relied2 on the combination of circulation/subscription revenues and advertising revenues (sometimes complemented by public subsidies3) to finance their activities. The conventional business model used by media firms exploits their role as platforms of interaction between two categories of users: audiences (consumers) and advertisers. Exchanges arising in media markets often generate cross network externalities (between advertisers and consumers, and vice versa), producing interactions between the demand for advertising and the demand for media content. Accordingly, traditional media outlets naturally appear as two-sided platforms. In light of all changes carried by the digital disruption and the convergence phenomenon, the frontiers of media markets are going through a process of deep transformation. The cost of information provision and diffusion has become much lower and the speed of information exchange has enormously increased. This process has immensely expanded the possibilities to create value. Conventional media are now “coopeting”4 with a variety of new media outlets, predominantly based on the existence of Internet (e.g. online press, online TV, social networks, news aggregators, blogs, and many others). In this context, new important players, like telecommunication companies or “Internet giants” (Apple, Google, Amazon) are consolidating their positions in the media markets. In particular, telecommunications companies see their activity no longer restricted to the provision of telephone or Internet connections. Nowadays these companies present themselves as service