An Analysis on Market Structure of Broadcast Service – Issues on Optimal Level of Channel Variety –
Unlike general goods, broadcasting service is financed not only by consumer’s direct payment but also by advertisement revenue. In other words, broadcasting service is supported by direct and indirect financial sources. However, rate of dependence on those financial sources are different by each media type; Terrestrial broadcasting carrier primarily depends on advertisement revenue while cable TV carrier and satellite carrier, which is called as pay-TV primarily depend on payment from audience in addition to small amount of advertisement revenue. In this paper, we examine broadcast market, where carriers with different financial sources compete in the market, and analyze market performance as a result of competition. Especially, we focus on the effect of competition in the mixed market which includes advertising supported media and subscription fee supported media. We made economic model and analyze the difference on several types of market. Our principle results of Case III, the market that an advertisement supported carrier and a subscription supported carrier compete in the market, are as follows;. (1) The greater the substitutability is, the number of channels supplied by advertisement supported media increases while those supplied by subscription fee supported carrier decreases. (2) Total number of channels supplied by advertisement supported carrier and subscription fee supported carrier is equal to the number of channels supplied by an advertisement supported carrier (Case II). (3) Total TV watching time of Case III is equal to Case II. (4) Because the amount of payment by consumer increases compared to Case II, consumer surplus decreases. General economic model predicts that the increase of the number of entrants brings the increase of consumer surplus. However, in our model, we show here that the increase of the number of entrants does not necessarily bring the increase of consumer surplus.
|Date of creation:||02 Aug 2007|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Michael Spence & Bruce Owen, 1977. "Television Programming, Monopolistic Competition, and Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 91(1), pages 103-126.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:4344. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.