DP4174 Monopoly Practises and Competitive Behaviour in the French Satellite Pay-TV Market

Author(s): Michele Cincera, Abdul Noury
Publication Date: January 2004
Keyword(s): competition, media, pay-tv, structural models
JEL(s): L22, L82
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4174

This Paper uses monthly data from a differentiated market dominated by a duopoly to analyse the nature of interactions between competitor firms. The incumbent, Canal Satellite, and the entrant, TPS, have dominated the French satellite pay-TV market, characterized by a monopoly until the end of 1997. This Paper investigates the effects of the entry and tests for collusive behaviour by means of non-nested methods in this duopoly with differentiated products. The main findings reject collusive behaviours in favour of Stackelberg competition with the incumbent as the leader. A preliminary comparison with the UK Satellite pay-TV market characterized by a monopoly indicates that prices are substantially lower in France. In view of our results, we argue that the difference can be explained by more competition between firms in the French case.