Exclusive Content in Two-Sided Markets

Abstract

This study investigates the role of exclusive content provision in two-sided markets where both sides are allowed to join multiple platforms. We consider a model of duopolistic two-sided platform market with a monopolistic multi-product (content) firm on one side, and consumers on the other. The model demonstrates that the monopolistic content provider uses exclusivity as strategic commitment to balance the two opposite effects on its bargaining power: the positive effect caused by increase in multi-homing consumers and the negative effect caused by restriction of distribution channels.