Header

UZH-Logo

Maintenance Infos

Market provision of program quality in the television broadcasting industry


Lin, Panlang (2011). Market provision of program quality in the television broadcasting industry. Contributions to Economic Analysis & Policy, 11(1):Article 17.

Abstract

This paper uses a simple model of duopoly competition to study the market provision of program quality offered by television broadcasters under three different regimes. In regime 1, two broadcasters are financed only with subscription fees (i.e., fee-based or pay TV). In regime 2, the two broadcasters generate their revenues only from advertising (i.e., free TV). In regime 3, one pay TV broadcaster competes with one free TV broadcaster. We show that the broadcasters in regime 3 (but not in regimes 1 and 2) vertically differentiate their channel programs if, for a given level of advertising market profitability, viewers strongly or weakly dislike the presence of advertising. In such cases, although the two pay TV broadcasters in regime 1 will unambiguously offer higher or lower quality programming than the two free TV broadcasters under regime 2, it is not clear which broadcaster will provide higher or lower program quality in regime 3 because this depends on the degree of horizontal differentiation between the channel programs. However, the levels of quality offered under regimes 1 and 2 fall between the quality levels offered by the two broadcasters in regime 3

Abstract

This paper uses a simple model of duopoly competition to study the market provision of program quality offered by television broadcasters under three different regimes. In regime 1, two broadcasters are financed only with subscription fees (i.e., fee-based or pay TV). In regime 2, the two broadcasters generate their revenues only from advertising (i.e., free TV). In regime 3, one pay TV broadcaster competes with one free TV broadcaster. We show that the broadcasters in regime 3 (but not in regimes 1 and 2) vertically differentiate their channel programs if, for a given level of advertising market profitability, viewers strongly or weakly dislike the presence of advertising. In such cases, although the two pay TV broadcasters in regime 1 will unambiguously offer higher or lower quality programming than the two free TV broadcasters under regime 2, it is not clear which broadcaster will provide higher or lower program quality in regime 3 because this depends on the degree of horizontal differentiation between the channel programs. However, the levels of quality offered under regimes 1 and 2 fall between the quality levels offered by the two broadcasters in regime 3

Statistics

Citations

Dimensions.ai Metrics
9 citations in Web of Science®
8 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

34 downloads since deposited on 29 Oct 2018
32 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:National licences > 142-005
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:television broadcasting; quality provision; advertising; media
Language:English
Date:19 January 2011
Deposited On:29 Oct 2018 14:58
Last Modified:24 Sep 2019 23:40
Publisher:Berkeley Electronic Press
ISSN:1935-1682
OA Status:Green
Publisher DOI:https://doi.org/10.2202/1935-1682.2805
Related URLs:https://www.swissbib.ch/Search/Results?lookfor=nationallicencegruyter102202193516822805 (Library Catalogue)

Download

Green Open Access

Download PDF  'Market provision of program quality in the television broadcasting industry'.
Preview
Content: Published Version
Language: English
Filetype: PDF (Nationallizenz 142-005)
Size: 204kB
View at publisher