Network externalities and government restrictions on satellite broadcasting of key sporting events

Boardman, A.E. and Hargreaves Heap, Shaun (1999) Network externalities and government restrictions on satellite broadcasting of key sporting events. Journal of Cultural Economics, 23 (3). pp. 167-181. ISSN 0885-2545

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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.

Item Type: Article
Uncontrolled Keywords: market failure,network externalities,public policy,tv broadcasting
Faculty \ School: Faculty of Social Sciences > School of Economics
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Depositing User: Pure Connector
Date Deposited: 22 Nov 2013 14:27
Last Modified: 21 Mar 2019 11:01
URI: https://ueaeprints.uea.ac.uk/id/eprint/44439
DOI:

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