Research On Differentiation Competition And Strategy Of TV Media Advertising Platform

Such a type of "dumbbell" enterprise widely exists in the life, the platform provides products or services to both sides of the end-users, and both sides of the users transact only through the platform, economists defined it as two-sided markets. In2004, the "two-sided markets Conference" marks the formation of the theory. Compared with the traditional market, two-sided markets platform connects two types of users. It finds a reasonable price levels and price structures to attract both groups.Regards to the economic characteristics of the Advertising-Supported TV Media, it is typical the audience maker. TV firms as an intermediary connect with advertisers and audiences, who interact only through the media platform. TV Media provides programs bundled with advertising to the audience, also it sells advertising slot to enterprises, but audiences dislike advertising. In this sense there is a negative externality from advertisers to viewers and positive externality from viewers to advertisers. For this, decision-making for TV media advertising platform differs with traditional market, which worth research.The paper catches the economic and industry characteristics of the TV media, analysis the impact of differentiation competition to the optimal decision and the mechanisms. We consider a three-stage game. At last, we have an extension to the model.Study shows that, contrary to the traditional market, the characteristics of TV Media decision-making are different. The quantities are strategic complements, and the prices are strategic substitutes. In addition, the media generally believe in the truth of "attract the audience, win the world". But study shows that advertiser’ preferences effects more than that of the audience, as TV media is ad-supported.However, it is undeniable that the audiences are the basis of the media. Platforms often attract the audience by means of horizontal and vertical differentiation, thus form the advertising demand. Study shows that the TV channels valued more by the advertisers have higher price and more audience. When quality investment exits in TV channels, quantities decision and ways of profit-making for advertising are some kind of different, which depends on the size of quality investment. With further study, it concludes that due to the business-stealing effect and agglomeration effect, the profit of TV media increases with the substitution of the channels. It explains the phenomenon of the convergence of television types of ad-supported television channels. Though multi-channel is the trend of the media industry, it does not mean more channels is better. The number of channels depends on its profitability——ability to get both sides on board. If the channel’s substitution is big enough, then the platform will launch the profitable and advertisers preferred TV channel only,which goes against with the maximu of the consumer surplus.At last, this article chooses the cases and data of television industry to verify the conclusions.