Abstract   

Two-sided markets have so far been developed into one of the most influential economics theory during the last decade. However, it has so far barely received a consistent definition. The major difference among scholars is whether to set bilateral or unilateral indirect network externalities as one of the substantial requirements. What further underlies the debate is whether or not advertising-supported media is a canonical example of two-sided markets. After taking a look at the media industry, this article contends that advertising-supported media is not a two-sided market. Media providers only acquire content from advertisers for their own purposes, and advertising is neither sufficient nor necessary for the media industry. Since advertising-supported media is not a two-sided market, two-sided markets should be defined with reference to bilateral indirect network externalities.

Keywords

Two-sided Markets, Definition, Advertising-supported Media

JEL

D85, L14, L82, M37

Download Link

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2398217