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A public and private-choice model of broadcasting

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  • Eli Noam

Abstract

This paper has established a framework for the analysis of program diversity and audience shares under different regimes of ownership, regulation, and channel quality. The model is one of comparative statics, and lends itself to analytical solutions. It can serve as a tool to clarify programming decision-making and the impact of various institutional arrangements. The audience maximization of commercial broadcasting leads to program quality similar to that of a direct democratic process. To create a bias towards quality, alternative mechanisms had to be introduced. That, together with the potential for the propaganda use of broadcasting and the potentially large rents of controlling a scarce channel, made questions of broadcast policy extraordinarily hard-fought, especially in European countries. However, the emergence of alternative distribution channels and payment mechanisms has moved television programs much more into the mainstream of economic transactions. In consequence, the need to use the political arena to assure the supply of certain programs has declined, the marginal losses to incumbent channels has successively decreased, and the propaganda reach has been reduced by the spread of programs over the distribution. Therefore, liberalization is less resisted because the stakes have become lower. There are, however, some losers, in relative or absolute terms, of a multichannel media landscape, in particular the traditional public-broadcast institutions. Not only does their audience share decline, but, most fundamentally, an important part of their programming function, together with the influential constituencies that go with it, is taken away by regular market participants. Thus, while the analysis predicts a decline in the importance and intensity of media policy discussion, the major exception will be the friction accompanying the decline in the scope of public broadcasting. Copyright Martinus Nijhoff Publishers 1987

Suggested Citation

  • Eli Noam, 1987. "A public and private-choice model of broadcasting," Public Choice, Springer, vol. 55(1), pages 163-187, September.
  • Handle: RePEc:kap:pubcho:v:55:y:1987:i:1:p:163-187
    DOI: 10.1007/BF00156816
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    References listed on IDEAS

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    1. Jack H. Beebe, 1977. "Institutional Structure and Program Choices in Television Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 15-37.
    2. Michael Spence & Bruce Owen, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 103-126.
    3. Peter O. Steiner, 1952. "Program Patterns and Preferences, and the Workability of Competition in Radio Broadcasting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 66(2), pages 194-223.
    4. Paul W. MacAvoy, 1977. "Deregulation of Cable Television," Books, American Enterprise Institute, number 918306, September.
    5. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
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    Cited by:

    1. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, in: V.A. Ginsburgh & D. Throsby (ed.), Handbook of the Economics of Art and Culture, edition 1, volume 1, chapter 18, pages 567-614, Elsevier.
    2. Doyle, Chris, 1998. "Programming in a competitive broadcasting market: entry, welfare and regulation," Information Economics and Policy, Elsevier, vol. 10(1), pages 23-39, March.
    3. John Gasper, 2009. "Reporting for sale: the market for news coverage," Public Choice, Springer, vol. 141(3), pages 493-508, December.
    4. Papandrea, Franco, 1997. "Modelling television programming choices," Information Economics and Policy, Elsevier, vol. 9(3), pages 203-218, September.
    5. Ascensión Andina, 2003. "What Do Media Outlets Compete For?," Working Papers. Serie AD 2003-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    6. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    7. Paul Fenn & David Paton & Leighton Vaughan Williams, 2009. "Productivity growth and funding of public service broadcasting," Public Choice, Springer, vol. 141(3), pages 335-349, December.
    8. Daniel Sutter, 2006. "Media scrutiny and the quality of public officials," Public Choice, Springer, vol. 129(1), pages 25-40, October.
    9. Beck Hanno & Beyer Andrea, 2013. "Öffentlich-Rechtlicher Rundfunk in der Krise: Reformbedarf und Reformoptionen / Public broadcasting in crisis," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 64(1), pages 221-252, January.
    10. Ascensión Andina-Díaz, 2007. "Reinforcement vs. change: The political influence of the media," Public Choice, Springer, vol. 131(1), pages 65-81, April.
    11. Norbert Schulz & Joachim Weimann, 1989. "Competition of newspapers and the location of political parties," Public Choice, Springer, vol. 63(2), pages 125-147, November.
    12. Richard D. Wang & J. Myles Shaver, 2016. "The Multifaceted Nature of Competitive Response: Repositioning and New Product Launch as Joint Response to Competition," Strategy Science, INFORMS, vol. 1(3), pages 148-162, September.
    13. Christine Benesch, 2010. "Governance of Public Broadcasters and Television Consumption," CREMA Working Paper Series 2010-18, Center for Research in Economics, Management and the Arts (CREMA).
    14. Ascensión Andina Díaz, 2011. "Mass Media in Economics: Origins and Subsequent Contributions," Working Papers 2011-02, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    15. Baron, David P., 2003. "Competing for the Public through the News Media," Research Papers 1808, Stanford University, Graduate School of Business.

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