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The Random Long Tail and the Golden Age of Television

In: Innovation Policy and the Economy, Volume 17

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  • Joel Waldfogel

Abstract

Digitization has reduced the costs of production, distribution, and promotion in music, movies, and books, with major consequences for both the number of new products made available as well as the realized quality of the best new products.1 Cost reductions, along with relaxed gatekeeping constraints, make possible the creation of additional content. Then because of the inherent unpredictability of new product appeal (Goldman 1989; Caves 2000), some of the new products turn out to be surprisingly good. Given unpredictability, growth in the number of new products made available gives rise to growth in the number of products beyond a high-quality threshold. The strongest evidence for this mechanism is the growing share of "ex ante losers"--products from independent producers, many of which would not have come to market before digitization--among "ex post winners," the best-selling products that consumers find most appealing. The evidence for this mechanism is strong in music, books, and movies.What about television? This question is of interest both as another context for exploring this mechanism, as well as because of the traditional regulatory interest in promoting high-quality and diverse programming. This paper uses new data from a variety of sources to explore the evolution of television quality in the digital era. The idea that we are currently experiencing a "golden age of television" is not new; journalists and critics have made this observation.2 The additional contribution of this paper, beyond noting the golden age, is to link the observation that we are experiencing a plethora of high-quality new products to an economic mechanism related to digitization and the inherent nature of cultural products.The paper proceeds in three sections. Section I briefly outlines the theoretical mechanism by which cost reduction, along with unpredictability, could give rise to increases in the number of high-quality products. Section I also descr
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Suggested Citation

  • Joel Waldfogel, 2016. "The Random Long Tail and the Golden Age of Television," NBER Chapters, in: Innovation Policy and the Economy, Volume 17, pages 1-25, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:13758
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    References listed on IDEAS

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    1. Jack H. Beebe, 1977. "Institutional Structure and Program Choices in Television Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 15-37.
    2. Luis Aguiar & Joel Waldfogel, 2018. "Quality Predictability and the Welfare Benefits from New Products: Evidence from the Digitization of Recorded Music," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 492-524.
    3. Waldfogel, Joel & Reimers, Imke, 2015. "Storming the gatekeepers: Digital disintermediation in the market for books," Information Economics and Policy, Elsevier, vol. 31(C), pages 47-58.
    4. Aguiar, Luis & Waldfogel, Joel, 2016. "Even the losers get lucky sometimes: New products and the evolution of music quality since Napster," Information Economics and Policy, Elsevier, vol. 34(C), pages 1-15.
    5. Michael Spence & Bruce Owen, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(1), pages 103-126.
    6. Joel Waldfogel, 2012. "Copyright Protection, Technological Change, and the Quality of New Products: Evidence from Recorded Music since Napster," Journal of Law and Economics, University of Chicago Press, vol. 55(4), pages 715-740.
    7. Peter O. Steiner, 1952. "Program Patterns and Preferences, and the Workability of Competition in Radio Broadcasting," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 66(2), pages 194-223.
    8. Erik Brynjolfsson & Yu (Jeffrey) Hu & Michael D. Smith, 2003. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Management Science, INFORMS, vol. 49(11), pages 1580-1596, November.
    9. Goldfarb, Avi & Greenstein, Shane M. & Tucker, Catherine E. (ed.), 2015. "Economic Analysis of the Digital Economy," National Bureau of Economic Research Books, University of Chicago Press, number 9780226206981, December.
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    Cited by:

    1. Leonard Nakamura & Jon Samuels & Rachel Soloveichik, 2017. "Measuring the “Free” Digital Economy within the GDP and Productivity Accounts," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2017-03, Economic Statistics Centre of Excellence (ESCoE).
    2. Leonard I. Nakamura & Jon Samuels & Rachel Soloveichik, 2016. "Valuing \"Free\" Media in GDP: An Experimental Approach," Working Papers 16-24, Federal Reserve Bank of Philadelphia.
    3. Ricarda Schauerte & Stéphanie Feiereisen & Alan J. Malter, 2021. "What does it take to survive in a digital world? Resource-based theory and strategic change in the TV industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 263-293, June.
    4. Joel Waldfogel, 2021. "Digitization and Its Consequences for Creative-Industry Product and Labor Markets," NBER Chapters, in: The Role of Innovation and Entrepreneurship in Economic Growth, pages 397-424, National Bureau of Economic Research, Inc.
    5. Pablo Bello & David Garcia, 2021. "Cultural Divergence in popular music: the increasing diversity of music consumption on Spotify across countries," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-8, December.

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