Ad-avoidance technology : who should welcome It?

Abstract

The business model of many commercial TV-networks is to interrupt TV programs with advertising breaks. In this paper we investigate consequences of the fact that ad-averse viewers today can adopt technology which enables them to skip the advertising breaks. Perhaps somewhat surprisingly, we find that the ad-avoidance technology can make TV networks and the advertisers better off. The viewers as a group however, are always worse off when we take into account their costs associated with adopting the technology.