How Broadcasting Quotas Harm Program Diversity

Perona, Mathieu (2010): How Broadcasting Quotas Harm Program Diversity.

Abstract

Broadcasting quotas of domestic contents are commonplace in developed countries. The core argument for them is to promote diversity by making more room for domestic content and hence foster a more diverse production. However, this intuitive reasoning ignores the trade-off between repetition (broadcasting more of the same) and new program diffusion. If each consumer cares only about a small fraction on the total contents of the program, a broadcaster confronted to a quota will find optimal to compensate for the reduction of foreign programming by increasing the number of diffusions of substitutable domestic programs. Total broadcasting time being limited, this will force the broadcaster to slash marginal (less popular) types of programming, whereby reducing program diversity. This mechanism applies both in a monopoly and an imperfectly competitive setting. It thus undermines one of the main rationales for quotas of domestic content.

• Item Type: MPRA Paper
• Language: English
• Keywords: radio, broadcasting, cultural quotas, diversity
• Subjects: L - Industrial Organization > L8 - Industry Studies: Services > L82 - Entertainment ; Media; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z10 - General; L - Industrial Organization > L5 - Regulation and Industrial Policy > L59 - Other

References

Acheson, K., and C. Maule (2006): “Culture in International Trade”, in Hanbook of the Economics of Art and Culture, ed. by V. Ginsburgh, and D. Throsby, vol. 1, chap. 33, pp. 1141 – 1183. North-Holland.

Anderson, S. P., and S. Coate (2005): “Market Provision of Broadcasting: A Welfare Analysis”, Review of Economic Studies, 72(4), 947–972.

Anderson, S. P., and J. J. Gabszewicz (2006): “The Media and Advertising: A Tale of Two-Sided Markets”, in Handbook of the Economics of Art and Culture, ed. by V. Ginsburgh, and D. Throsby, vol. 1, chap. 18, pp. 567–614. Elsevier.

Beebe, J. H. (1977): “Institutional Structure and Program Choices in Television Markets”, The Quaterly Journal of Economics, 91(1), 15–37.

Caillaud, B., and B. Jullien (2003): “Chicken & Egg: Competition among Intermediation Service Providers”, The RAND Journal of Economics, 34(2), 309–328.

Caves, R. E. (2002): Creative Industries. Harvard university Press.

Connoly, M., and A. B. Krueger (2006): “Rockonomics : The Economics of Popular Music”, in Handbook of the Economics of Art and Culture, ed. by V. Ginsburgh, and D. Throsby, vol. 1, chap. 20, pp. 667 – 719. Elsevier.

Doyle, C. (1998): “Programming in a competitive broadcasting market: entry, welfare and regulation”, Information Economics and Policy, 10, 23 – 39.

Dukes, A., and E. Gal-Or (2003): “Minimum Differentiation in Commercial Media Markets”, Journal of Economics & Management Strategy, 12(3), 291–325.

François, P., and T. van Ypersele (2002): “On the protection of cultural goods”, Journal of International Economics, 56(2), 359 – 369.

Gabszewicz, J., D. Laussel, and N. Sonnac (1999): “TV-Broadcasting Competition and Advertising”, Lucarnes bleues # 9972 CREST/LEI, CORE Discussion Paper # 2000(6).

Gabszewicz, J., D. Laussel, and N. Sonnac (2004): “Programming and Advertising Competition in the Broadcasting Industry”, Journal of Economics & Management Strategy, 12(3), 657–669.

Gabszewicz, J. J., D. Laussel, and N. Sonnac (2001): “Press advertising and the ascent of the ’Pensee Unique’”, European Economic Review, 45(4-6), 645–651.

Gabszewicz, J. J., D. Laussel, and N. Sonnac (2002): “Press Advertising and the Political Differentiation of Newspapers”, Journal of Public Economic Theory, 4(3), 317–34.

Ranaivoson, H. (2007): “How to support cultural diversity in the cultural industries ? The Case of the French Music Industry”, Conference of the ESA Research Network. New Frontiers in Arts Sociology: Creativity, Support and Sustainability.

Richardson, M. (2004a): “Cultural quotas in broadcasting I: a model”, ANUCBE School of Economics Working Papers 2004-442, Australian National University, College of Business and Economics, School of Economics.

Richardson, M. (2004b): “Cultural quotas in broadcasting II: policy”, ANUCBE School of Economics Working Papers 2004-443, Australian National University, College of Business and Economics, School of Economics.

Robertson, B.(2006) "The Colonel Blotto Game", Economic Theory, 29, 1 - 24

Rochet, J.-C., and J. Tirole (2002): “Cooperation Among Competitors: Some Economics of Payment Card Associations”, Rand Journal of Economics, 33(4), 1–22.

Steiner, P. (1952): “Program Patterns and Preferences and the Workability on Competition in Radio Broadcasting”, Quaterly Journal of Economics, 66, 194 – 223.

van der Wurff, Richardson, M. (2005): “Competition, Concentration and Diversity in European Television Markets”, Journal of Cultural Economics, 29, 249 – 275.