The Economics of Public Service Broadcasting – A Research Agenda

Is there Still a Place for Public Service Television? Effects of the Changing Economics of Broadcasting, 57-69 (2013)

Posted: 30 Oct 2018

See all articles by Diane Coyle

Diane Coyle

Bennett Institute for Public Policy

Paolo Siciliani

UCL Faculty of Laws; Bank of England

Date Written: 2013

Abstract

In the analogue era, the constraint of spectrum scarcity meant there was room for only a handful of TV channels. What’s more, the technology did not permit the exclusion of non-­‐‑paying audiences, and this ‘non-­excludability’ ruled out subscription-­based pay TV. Commercial broadcasters therefore had to transmit their channels free to air (FTA) and rely on advertising revenues. The two-­sided nature of this business model ‒ needing to attract audiences and advertisers alike – meant that commercial programme-­making was aimed at attracting mass audiences with broadly popular programmes.

Under these circumstances, public intervention was usually justified by the need to cater for a wider variety of programmes, including those of niche interest. In particular, public service broadcasting was justified in order to guarantee the provision and consumption of ‘merit good’ programmes, those reckoned to be beneficial for wider reasons such as good citizenship. The restricted choice of channels available helped ensure that this kind of programme would not only be broadcast but also watched by large numbers of people. The traditional approach to PSB therefore did rely on key market failures such as consumption externalities and information asymmetries, especially the social benefits arising from bringing a large popular audience to programming with civic or educational benefits; but spectrum scarcity and non-­excludability due to analogue technology were nevertheless the specific market failures that helped PSB intervention achieve its aims and were normally cited as the main externalities public service broadcasting aimed to address.

Suggested Citation

Coyle, Diane and Siciliani, Paolo, The Economics of Public Service Broadcasting – A Research Agenda (2013). Is there Still a Place for Public Service Television? Effects of the Changing Economics of Broadcasting, 57-69 (2013). Available at SSRN: https://ssrn.com/abstract=3261336

Diane Coyle

Bennett Institute for Public Policy ( email )

Alison Richard Building
7 West Road
Cambridge, CB3 9DT
Great Britain

Paolo Siciliani (Contact Author)

UCL Faculty of Laws ( email )

Bentham House
Endsleigh Gardens
London, WC1H 0EG
United Kingdom

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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