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

  • Anthony Boardman
  • Shaun Hargreaves-Heap

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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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
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100284

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  1. 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.
  2. 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.
  3. 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.
  4. 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.
  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. 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.
  7. 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.
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