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
Date Written: 2013
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.
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