Pricing of media

The article discusses pricing strategies commonly adopted by media firms. More specifically, it discusses discriminating price strategies, the two part tariff, and new product pricing which includes cream skimming and penetration pricing, and pricing of product systems. The article also analyses the conditions under which the adoption of the aforementioned pricing strategies by media firms become possible. By following these pricing strategies media firms can extract greater profits than would be possible under a uniform pricing policy (charging the same price for all units). Higher profits accrue because the firm is able to appropriate partial or entire consumer surplus.