Economics of Domestic Cultural Content Protection in Broadcasting, The
AbstractWe analyze the economics of domestic cultural content protection in terrestrial broadcasting, the most widespread policy instrument used in broadcasting. Using the love-of-variety approach, we model a representative consumer deriving utility from broadcasting services net of advertising,and allocating scarce time between consuming the various broadcasting services and leisure. Advertising is a nuisance; it costs time yet brings no utility. Broadcasting is a pure public good; broadcasters make profit in the monopolistic competition environment by bundling advertising with valuable cultural content. We impose a discrete domestic content requirement and then investigate the effects of its marginal changes on consumption of domestic broadcasting. Domestic content requirement may reduce (increase) consumption of domestic programs when consumer's demand is highly elastic (inelastic), the degree of preference for foreign content over domestic content is high (low) and opportunity cost of listening time is high (low). The reduction occurs because the consumer reshuffles her consumption bundle towards leisure away from high domestic-content stations thereby reducing the overall aggregate consumption of broadcasting, and subsequently, the overall aggregate consumption of domestic programs.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12476.
Date of creation: 17 Nov 2005
Date of revision:
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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More information through EDIRC
boradcasting; domestic content; radio; cultural protection;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-01 (All new papers)
- NEP-CUL-2005-12-01 (Cultural Economics)
- NEP-MKT-2005-12-01 (Marketing)
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