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Are commercial ceilings adequate for the regulation of commercial overload on free-to-air TV channels?

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Author Info

  • Julia Rothbauer

    ()
    (Institute of Transport Economics, Muenster)

  • Gernot Sieg

    ()
    (Institute of Transport Economics, Muenster)

Abstract

Commercial ceilings not only restrict broadcasters in their decisions about commercial broadcasting time, but also affect their differentiation of program content. This study examines the welfare effects of commercial ceilings in a two-sided free-to-air TV market, taking into account welfare with respect to content differentiation. We identify a second-best commercial ceiling that maximizes welfare in the absence of enforceable program content regulation and identify the situations in which laissez faire is optimal. The deregulation of commercial broadcasting can improve welfare, even if the laissez-faire level of commercial broadcasting time is excessive.

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File URL: http://www.wiwi.uni-muenster.de/ivm/materialien/forschen/Veroeffentlichungen/WP19v0.pdf
File Function: First version, 2013
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File URL: http://www.wiwi.uni-muenster.de/ivm/materialien/forschen/Veroeffentlichungen/WP19.pdf
File Function: Revised version, 2014
Download Restriction: no

Bibliographic Info

Paper provided by Institute of Transport Economics, University of Muenster in its series Working Papers with number 19.

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Length: 20 pages
Date of creation: Sep 2013
Date of revision: May 2014
Handle: RePEc:mut:wpaper:19

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Keywords: advertising regulation; content differentiation; welfare;

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  1. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 949-965, July.
  2. Stühmeier Torben & Wenzel Tobias, 2012. "Regulating Advertising in the Presence of Public Service Broadcasting," Review of Network Economics, De Gruyter, vol. 11(2), pages 1-23, June.
  3. Choi, Jay Pil, 2006. "Broadcast competition and advertising with free entry: Subscription vs. free-to-air," Information Economics and Policy, Elsevier, vol. 18(2), pages 181-196, June.
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