New Television Networks

Rolla Edward Park

Bell Journal of Economics, 1975, vol. 6, issue 2, 607-620

Abstract: A simple model of television network competitive behavior is used to explore the prospects for new networks. Overall, the prospects are not very bright. A fourth network with complete, unhandicapped, nationwide coverage could coexist profitably with the existing three, but the industry would need a severe regulatory restructuring to make such a network possible. Most networks with incomplete coverage would not be profitable, including networks of existing independent stations, cable systems, new VHF "drop-in" stations (suggested by an Office of Telecommunications Policy report), or combinations of these. A network using existing independents plus new UHF stations constructed to give it nationwide coverage may become profitable as the UHF reception handicap continues to drop. None of the new networks considered threatens the profitability of the existing three networks.

Date: 1975
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