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

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  • 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

Suggested Citation

  • Anthony Boardman & Shaun Hargreaves-Heap, 1999. "Network Externalities and Government Restrictions on Satellite Broadcasting of Key Sporting Events," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 23(3), pages 165-179, August.
  • Handle: RePEc:kap:jculte:v:23:y:1999:i:3:p:165-179
    DOI: 10.1023/A:1007594418031
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. John O'Hagan & Michael Jennings, 2003. "Public Broadcasting in Europe: Rationale, Licence Fee and Other Issues," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 27(1), pages 31-56, February.
    3. Roger G. Noll, 2007. "Broadcasting And Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 400-421, July.
    4. Aliza Fleischer & Daniel Felsenstein, 2002. "Cost-Benefit Analysis Using Economic Surpluses: A Case Study of a Televised Event," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 26(2), pages 139-156, May.
    5. 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.
    6. 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).
    7. 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.
    8. Vincent G. Fitzsimons, 2011. "The Impact of New Technology on Leisure Networks," Chapters,in: Handbook on the Economics of Leisure, chapter 22 Edward Elgar Publishing.

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