The Convergence between Content and Access: Internalizing the Market Complementarity

Abstract

Developing a simple model of the content and access industries in the digital era, we show that, given the positive consumption externality from entertainment content (music, video) on access networks and playing devices (fixed broadband, 3G mobile, digital players, etc.), both content and access industries have an interest in blurring their business frontiers. As digital piracy, which is still increasing the above externality, benefits access providers to the detriment of content providers, a "win-win" game is possible only if access providers participate in content production, either through a subsidy or co-production.