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Network Externalities and Government Restrictions on Satellite Broadcasting of Key Sporting Events

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Author Info
Anthony Boardman
Shaun Hargreaves-Heap

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Abstract

Recently BSkyB, a subscription based satellite broadcaster, attempted to win the rights to broadcast key sporting events away from the over-the-air broadcasters. Although conventional rationales for government intervention do not seem to apply to this situation, the government announced that eight top sporting events would be guaranteed terrestrial transmission. This paper develops a new rationale which supports the government's policy. We argue that transmission on BSkyB would reduce consumer surplus due to network externalities. People talk about things they have in common. When fewer people share the experience, this devalues the conversational value of the event. From an efficiency perspective, the best arrangement would combine terrestrial broadcasting of the main event with subscription broadcasting of aspects that appeal only to minority tastes. Copyright Kluwer Academic Publishers 1999

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File URL: http://hdl.handle.net/10.1023/A:1007594418031
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Publisher Info
Article provided by Springer in its journal Journal of Cultural Economics.

Volume (Year): 23 (1999)
Issue (Month): 3 (August)
Pages: 165-179
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Handle: RePEc:kap:jculte:v:23:y:1999:i:3:p:165-179

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Related research
Keywords: TV broadcasting; market failure; network externalities; public policy;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Brown, Allan & Cave, Martin, 1992. "The Economics of Television Regulation: A Survey with Application to Australia," The Economic Record, The Economic Society of Australia, vol. 68(203), pages 377-94, December.
  2. Becker, Gary S, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1109-16, October. [Downloadable!] (restricted)
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  3. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
  4. Beebe, Jack H, 1977. "Institutional Structure and Program Choices in Television Markets," The Quarterly Journal of Economics, MIT Press, vol. 91(1), pages 15-37, February. [Downloadable!] (restricted)
  5. Throsby, David, 1994. "The Production and Consumption of the Arts: A View of Cultural Economics," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 1-29, March. [Downloadable!] (restricted)
  6. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John O'Hagan & Michael Jennings, 2003. "Public Broadcasting in Europe: Rationale, Licence Fee and Other Issues," Journal of Cultural Economics, Springer, vol. 27(1), pages 31-56, February. [Downloadable!] (restricted)
  2. Aliza Fleischer & Daniel Felsenstein, 2002. "Cost-Benefit Analysis Using Economic Surpluses: A Case Study of a Televised Event," Journal of Cultural Economics, Springer, vol. 26(2), pages 139-156, May. [Downloadable!] (restricted)
  3. George Tsourvakas, 2003. "Techniques to Enhance the Transmission of Quality Programs by Private Television Channels in Europe," European Journal of Law and Economics, Springer, vol. 16(2), pages 233-245, September. [Downloadable!] (restricted)
  4. Cecile Aubert & Pranab K. Bardhan & Jeff Dayton-Johnson, 2004. "Artfilms, Handicrafts and Other Cultural Goods: The Case for Subsidy," Public Economics 0407001, EconWPA. [Downloadable!]
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