PhD defence: Harald Nygård Bergh

On Friday 3 May 2013 Harald Nygård Bergh will hold a trial lecture on a prescribed topic, and defend his thesis for the PhD degree at NHH.

The topic of the thesis is pricing in media industries. Pricing in these industries is often complicated by customer groups being interconnected through network effects. For instance, a viewer's willingness to pay for watching a TV program is usually decreasing with advertisement volume, while an advertiser's willingness to pay for an ad increases with the size of the audience. Media firms must take these effects into account when they set prices. Against this backdrop, Bergh analyzes in four essays how media firms should respond to technological change.

As strategic agents, TV distributors play an important role in today's TV market. The first essay shows that the strategic game played between a powerful TV channel and TV distributors affects the variety of TV channels available to viewers. The explanation for this is that the distribution strategy of the TV channel affects the distributors' marginal revenue of transmitting other TV channels.

Today's technology allows distributors to unbundle, in other words, sell TV channels à la carte. The second essay shows that this may create a counterproductive struggle in the industry. When the distributors set prices, they internalize the fact that viewers dislike advertisements, but not that the value of ads increases with the size of the audience. The result is too high prices and too little advertising.

Digital Video Recorders are a new technology that allows viewers to skip ads. However, due to adoption costs, only viewers that strongly dislike advertising will find it worthwhile to adopt this technology. The third essay shows that ad-financed TV channels may actually benefit from some adoption of ad-avoidance technologies, as this allows them to profitably sell more advertisements and charge the viewers a higher price.

In the videogame industry it is increasingly common that one and the same videogame title is available for several competing video game consoles. The last essay shows that this development makes it profitable for a producer of consoles to charge higher prices, both for the consoles and for the rights to develop games for the console.

The trial lecture and thesis defense will be open to the public. Copies of the thesis will be available from: presse@nhh.no