Industrial Economics

This chapter introduces the industrial economic foundations of media economics. Due to the relevance and scope of this topic, we will limit ourselves to the presentation of the theory of two-sided platforms and their relation to media markets. After the introduction, we first discuss network effects which are fundamental for two-sided markets and media platforms, before turning to an intuitive model of a two-sided platform. We analyze the model for both monopolistic and duopolistic markets, followed by a comparison of the two market forms in terms of prices, quantities, and welfare. After presenting further aspects of two-sided platforms, the chapter concludes with a summary.