Yihao Yuan, PhD Candidate, The Wharton School; Aviv Nevo, Economics, University of Pennsylvania
Abstract: Vertical integration in the video streaming market has become increasingly prevalent in recent years. Notable examples include Amazon’s merger with MGM, Walt Disney’s acquisition of Hulu, and the launch of streaming platforms by various studios such as Paramount and NBCUniversal. Many studios now license most of their shows to their vertically integrated streaming platforms, which has led to consumer complaints about the need for multiple subscriptions to access content that they want. However, vertical integration may also improve market efficiency by stimulating competition among streaming services and increasing the licensing of titles. In this project, I plan to investigate the effects of vertical integration on market structure and consumer demand. I will develop a structural model and use data-driven methods to quantify the impact of vertical integration on consumer welfare and the profits of studios and streaming platforms in the video streaming market, a fast-growing market that already accounts for more than a quarter of all time spent on television sets by Americans.