Handbook on the Economics of the Media

Handbook on the Economics of the Media

Edited by Robert G. Picard and Steve S. Wildman

This Handbook explores the economic features of the media and its infrastructure to provide readers with a sophisticated understanding of the critical issues and their influence on companies, audiences and regulators. The contributors explore and explain the impact of underlying factors such as multi-sided platforms, advertising and industry structure. They assess the unique economic factors affecting print, broadcast and broadband-based media, and highlight how the economics of the media can influence policy making. Each original chapter introduces the reader to a specific topic, reviews the literature on the development of knowledge in the field, explores critiques of the approach, and provides an understanding of applying this knowledge and the implications.

Chapter 8: The economics of television: excludability, rivalry, and imperfect competition

Patrick Barwise and Robert G. Picard

Subjects: economics and finance, cultural economics, industrial economics, innovation and technology, technology and ict

Extract

Television is a part of everyday life and it is easy to overlook the complex economic factors and choices underpinning it. This chapter is designed to clarify those factors and choices by reviewing the fundamental elements of broadcasting economics, the economics behind different structural and financing choices, the economics of multichannel and pay television, how and why different forms of television are able to compete and coexist, and how digital switchover and convergence change, and might change, television economics. The fundamental questions of broadcasting economics involve how spectrum is allocated, who owns broadcasting, and how it is funded. The answers to these questions in different countries emerged from both economic rationales and technical, social, and political factors. The very nature of broadcasting requires governmental involvement: because it uses electromagnetic spectrum and spectrum is constrained, not all who might like to broadcast have been able to do so, thus fundamental policy decisions created the structure of television markets and also influenced their economic characteristics. Governments worldwide took different paths in creating television systems, usually following policy choices and trajectories they earlier created for radio. Some initially established television as a branch of government, some as public service television, and some as commercial television. In most countries the systems have evolved over time to create a mixture of state/public service and commercial television (or vice versa if they started with commercial broadcasting), with the size and wealth of countries greatly influencing the scale and scope of television services provided.

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