Network Externalities and Government Restrictions on Satellite Broadcasting of Key Sporting Events

Anthony Boardman and Shaun Hargreaves-Heap
Authors registered in the RePEc Author Service: Shaun Hargreaves Heap

Journal of Cultural Economics, 1999, vol. 23, issue 3, 165-179

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. Copyright Kluwer Academic Publishers 1999

Keywords: TV broadcasting; market failure; network externalities; public policy (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (12)

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DOI: 10.1023/A:1007594418031

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