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Economics of Domestic Cultural Content Protection in Broadcasting, The

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  • Bekkali, Mukhtar
  • Beghin, John C.

Abstract

We 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 Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12476.

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Date of creation: 17 Nov 2005
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Handle: RePEc:isu:genres:12476

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Keywords: boradcasting; domestic content; radio; cultural protection;

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  1. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
  2. Francois, Patrick & van Ypersele, Tanguy, 2002. "On the protection of cultural goods," Journal of International Economics, Elsevier, vol. 56(2), pages 359-369, March.
  3. Beghin, John C. & Sumner, D., 1992. "Domestic Content Requirements with Bilateral Monopoly," Staff General Research Papers 1571, Iowa State University, Department of Economics.
  4. Kala Krishna & Motoshige Itoh, 1986. "Content Protection and Oligopolistic Interactions," NBER Working Papers 1843, National Bureau of Economic Research, Inc.
  5. Simon P. Anderson & Stephen Coate, 2000. "Market Provision of Public Goods: The Case of Broadcasting," NBER Working Papers 7513, National Bureau of Economic Research, Inc.
  6. C. Leigh Anderson & Gene Swimmer & Wing Suen, 1997. "An empirical analysis of viewer demand for U.S. programming and the effect of Canadian broadcasting regulations," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(4), pages 525-540.
  7. Michael L. Mussa, 1984. "The Economics of Content Protection," NBER Working Papers 1457, National Bureau of Economic Research, Inc.
  8. Hollander, Abraham, 1987. "Content protection and transnational monopoly," Journal of International Economics, Elsevier, vol. 23(3-4), pages 283-297, November.
  9. Vousden, Neil, 1987. "Content protection and tariffs under monopoly and competition," Journal of International Economics, Elsevier, vol. 23(3-4), pages 263-282, November.
  10. Grossman, Gene M, 1981. "The Theory of Domestic Content Protection and Content Preference," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 583-603, November.
  11. André Sapir, 1991. "Le commerce international des services audiovisuels: une source de conflits entre la Communauté Européenne et les Etats-Unis," ULB Institutional Repository 2013/8218, ULB -- Universite Libre de Bruxelles.
  12. Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 27-41, January.
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Cited by:
  1. Janeba, Eckhard, 2007. "International trade and consumption network externalities," European Economic Review, Elsevier, vol. 51(4), pages 781-803, May.

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