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.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Beebe, J.H. (1977) “Institutional Structure and Program Choices in Television Markets”, Quarterly Journal of Economics 91: 15–37.
Becker, G.S. (1991) “A Note on Restaurant Pricing and Other Examples of Social Influences on Price”, Journal of Political Economy 99 (5): 1109–1116.
Becker, G.S. and Murphy, K.M. (1988) “A Theory of Rational Addiction”, Journal of Political Economy 96(4): 675–700.
Blumler, J.G. (ed.) Television and the Public Interest: Vulnerable Values in West European Broadcasting. Sage Publications, London.
Boardman, A.E. and Vining, A.R. (1984) “Canadian and British TV Markets: Why the CBC Should Not be Like the BBC”, Canadian Public Policy 10(3): 347–352.
Boardman, A.E., Greenberg, D.H., Vining, A.R. and Weimer, D.L. (1996) Cost Benefit Analysis: Concepts and Practice. Prentice Hall, Upper Saddle River, N.J.
Broadcasting Research Unit (1985) The Public Service Idea in British Broadcasting. London.
Brown, A. (1996) “Economics, Public Service Broadcasting, and Social Values” The Journal of Media Economics 9(1): 3–15.
Brown, A. and Cave, M. (1992) “The Economics of Television Regulation: A Survey with Application to Australia”, The Economic Record 68(202): 377–394.
Dunnett, P.J. (1990) The World Television Industry. Routledge, New York.
Graham, A. and Davies, G. (1992) “The Public Funding of Broadcasting”, in T. Congdon et al. (ed.), Paying for Broadcasting: The Handbook, pp. 167–221, Routledge, London.
Grudus, J.W. (1993) “Local Broadband Networks: A New Regulatory Philosophy”, Yale Journal of Regulation 10: 89–137.
Hansmann, H.B. (1980) “The Role of Nonprofit Enterprise”, Yale Law Journal 89(5): 835–901.
Hoskins, C., McFadyen, S. and Finn, A. (1997) Global Television and Film: An Introduction to the Economics of the Business. Clarendon Press, Oxford.
Katz, M.L. and Shapiro, C. (1985) “Network Externalities, Competition and Compatibility”, American Economic Review 75(3): 424–440.
Musgrave, R.A. (1959) The Theory of Public Finance. McGraw-Hill, New York.
Noll, R.G., Peck, M.J. and McGowan, J.J. (1973) Economic Aspects of Television Regulation. Brookings Institute, Washington D.C.
Owen, B.M. and Wildman, S.S. (1992) Video Economics. Harvard University Press, Cambridge, MA.
Paterson, D.G. and Rosenbluth, G. (1983) “Culture, Myths, and Fetish”, Canadian Public Policy 9(1): 134–137.
Peacock, A. (Chairman) (1986) Report of the Committee on Financing the BBC. HMSO, London.
Rothenberg, J. (1962) “Consumer Sovereignty and the Economics of TV Programming”, Studies in Public Communication 4: 45–54.
Spence, A.M. and Owen, B.M. (1977) “Television Programming, Monopolistic Competition and Welfare” Quarterly Journal of Economics 91: 103–126.
Sugden, R. and Williams, A. (1978) The Principles of Practical Cost-Benefit Analysis. Oxford University Press, Oxford.
Steiner, P.O. (1952) “Program Patterns and Preferences, and the Workings of Competition in Radio Broadcasting”, Quarterly Journal of Economics 66: 194–223.
Steiner, P.O. (1961) “Monopoly and Competition in Television: Some Policy Issues”, The Manchester School of Political Science 29: 107–131.
Stigler, G.S. and Becker, G.S. (1977) “De Gustibus Non Est Disputandum”, American Economic Review 67(2): 76–90.
Throsby, D. (1994) “The Production and Consumption of the Arts: A View of Cultural Economics”, Journal of Economic Literature 32: 1–29.
Vining, A.R. and Weimer, D.L. (1998) “Passive Use Benefits: Existence, Option and Quasi-Option Value”, in F. Thompson and Green, M.T. (eds.), Handbook of Public Finance, pp. 319–345, Marcel Dekker, New York.
Wildman, S.S. and Siwek, S.E. (1987) “The Privatization of European Television: Effects on International Markets for Programs”, Columbia Journal of World Business 22: 71–76.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Boardman, A.E., Hargreaves-Heap, S.P. Network Externalities and Government Restrictions on Satellite Broadcasting of Key Sporting Events. Journal of Cultural Economics 23, 165–179 (1999). https://doi.org/10.1023/A:1007594418031
Issue Date:
DOI: https://doi.org/10.1023/A:1007594418031