Mixing Media with Two-Part Tariffs∗

We consider a media market where consumers mix content of-fered by different firms and firms charge two-part tariffs. As com-pared to pure linear pricing (pay-per-view), firms make higher profits, while consumers are worse off and the allocation is not first-best. We also consider flat subscription fees and show that they make mixing unattractive. Both two-part tariffs and pay-per-view Pareto-dominate flat fees