How Should Carriage Disputes in Digital Media Be Addressed?

Disagreements between television networks or channels like AMC or Viacom, and media distributors like Comcast or DISH are endemic. In this research, we study the nature of contractual relationship between the television networks and media distributors in a multilayered two-sided framework to explain why carriage disputes (which are obviously non-equilibrium outcomes) have become so common in the current media marketplace. We find that there is a strategic tension between the interests of TV network companies and media distributor companies, and that maintaining agreements between these firms require non-contractible actions. These non-contractible actions are very different from the natural behavior of the firms, so the agreement can only be maintained if each firm has recourse to a credible, costly, and temporary threat- a carriage dispute.