Overlapping ownership and quality spillovers in free-to-air broadcasting

This study develops a Hotelling model with vertical differentiation to analyze how overlapping ownership and quality spillovers shape equilibrium outcomes in the free-to-air broadcasting industry. Platforms invest in content quality and set advertising levels, which generate revenues but impose nuisance costs on viewers. The analysis shows that spillovers create free-riding incentives and lead to underinvestment in quality, while overlapping ownership relaxes competition, raising advertising intensity and reducing quality provision. The welfare consequences depend on the social desirability of advertising: when advertising is sufficiently valuable, ownership overlap and spillovers can enhance welfare; otherwise, they harm consumers and lower total welfare. Importantly, the interaction between spillovers and ownership overlap further restricts the scope for welfare improvements.