nep-cul New Economics Papers
on Cultural Economics
Issue of 2020‒05‒18
two papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Business models for streaming platforms: content acquisition, advertising and users By E. Carroni; D. Paolini
  2. Binge-watching (Netflix) product placement: A content analysis on different product placements in Netflix originals vs. non-Netflix originals, and drama vs. comedy shows By Laban, Guy; Zeidler, Chamoetal; Brussee, Eline

  1. By: E. Carroni; D. Paolini
    Abstract: A streaming platform obtains contents from artists and offers commercial spaces to advertisers. Users value contents' variety and quality of the service and are heterogeneously bothered by ads. Two solutions can be proposed to users. If they pay a positive price, they subscribe to a commercial-free service with an upgrade of quality (Premium). Otherwise, they have free access to a service of a basic quality. We find that a wider audience gives incentives to the platform to increase both the advertising intensity and the quality upgrade in the Premium. As a consequence, some people move to the Premium. At the limit, the platform opts for a purely subscription-based business model as the audience reaches a certain level. The parsimonious model we propose is able to give a rationale to the emergence of different business models in the streaming market as well as to the (end of the) disputes between artists and the Spotify model.
    Keywords: Media;Advertising;Multi-Sided Markets;Platform;Second-degree price discrimination
    Date: 2020
  2. By: Laban, Guy (University of Glasgow); Zeidler, Chamoetal; Brussee, Eline
    Abstract: The popularity of digital streaming platforms, such as Netflix, is gradually growing. While digital streaming platforms share similar economic interests as traditional producing and broadcasting companies, the two differ in operation and nature of consumption. These platforms constructed new means of consuming content, offering licensed and original content. This study describes and examines how product placements, a popular advertising strategy that integrates commercials in media entertainment content, are applied in an up-to-date digital environment. A content analysis was conducted of product placements in comedy and drama shows within Netflix originals and non-Netflix originals shows. The study results indicate that Netflix original shows include more product placements than non-Netflix original shows. Moreover, drama shows include more product placements than comedy shows, and these are more explicit and visual. Finally, it was found that product placements categories can be predicted by the genre of the show, but not by the production type.
    Date: 2020–05–12

This nep-cul issue is ©2020 by Roberto Zanola. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.