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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

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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Bibliographic 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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Web page: http://www.springerlink.com/link.asp?id=100284

Related research

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

References

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  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. Gary S. Becker & Kevin M. Murphy, 1986. "A Theory of Rational Addiction," University of Chicago - George G. Stigler Center for Study of Economy and State 41, Chicago - Center for Study of Economy and State.
  3. Gary S. Becker, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," University of Chicago - George G. Stigler Center for Study of Economy and State 67, Chicago - Center for Study of Economy and State.
  4. Spence, A Michael & Owen, Bruce, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, MIT Press, vol. 91(1), pages 103-26, February.
  5. 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.
  6. 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.
  7. 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.
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Cited by:
  1. Evens, Tom, 2010. "Challenging content exclusivity in network industries: the case of digital broadcasting," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 12, International Telecommunications Society (ITS).
  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.
  3. Roger G. Noll, 2007. "Broadcasting And Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 400-421, 07.
  4. Aubert, Cècile & Bardhan, Pranab & Dayton-Johnson, Jeff, 2003. "Artfilms, Handicrafts and Other Cultural Goods: The Case for Subsidy," Department of Economics, Working Paper Series qt62n4f3bh, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. 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.
  6. Turner, Paul, 2012. "Regulation of professional sport in a changing broadcasting environment: Australian club and sport broadcaster perspectives," Sport Management Review, Elsevier, vol. 15(1), pages 43-59.
  7. 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.

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