Advertising types cross-network effects on two sided platforms

Broadcast TV is a well-known example of a two-sided platform where cross network effects on the viewer and advertising sides interact. Like many platforms, it is advertiser-financed. While the literature shows that viewers dislike advertising, we explore a unique data set and distinguish between paid and non-paid (informative) ads. Cross-network effects’ estimates show that the latter carry a positive network effect on viewership. We also explore a significant change in public interest for more information in TV content in Russia in 2022 to estimate structural changes to cross-network effects. The results indicate that negative paid ads’ cross-network effects on viewership demand become stronger while positive non-paid (information) ads cross-network effects­ become weaker, even conditional on TV programing changes. Symmetrically, on the other side of the platform, advertisers value viewership less after the preference change.