Public and Private Activity in Commercial TV Broadcasting

Publikation: Working paperForskning

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Resumé

We consider a model of commercial television market, where private broadcasters coexist with a public television broadcaster. Assuming that the public TV station follows a policy of Ramsey pricing whereas the private stations are profit maximizers, we consider the equilibria in this market and compare with a situation where the public station is privatized and acts as another private TV broadcaster. A closer scrutiny of the market for commercial television leads to a distinction between target rating points, which are the prime unit of account in TV advertising, and net coverage, which is the final goal of advertisers. Working with net coverage as the fundamental concept, we exploit the models of competition between public and private price and quantity in order to show that privatization of the public TV station entails a welfare loss and results in TV advertising becoming more expensive.Keywords: TV broadcasting, imperfect competition, Ramsey pricing, welfare comparison.JEL classification: L11, L82, L33
OriginalsprogEngelsk
Udgivelses stedKøbenhavn
Antal sider23
StatusUdgivet - 2006

Emneord

  • x
  • TV broadcasting
  • imperfect competition
  • Ramsey pricing

Citer dette

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title = "Public and Private Activity in Commercial TV Broadcasting",
abstract = "We consider a model of commercial television market, where private broadcasters coexist with a public television broadcaster. Assuming that the public TV station follows a policy of Ramsey pricing whereas the private stations are profit maximizers, we consider the equilibria in this market and compare with a situation where the public station is privatized and acts as another private TV broadcaster. A closer scrutiny of the market for commercial television leads to a distinction between target rating points, which are the prime unit of account in TV advertising, and net coverage, which is the final goal of advertisers. Working with net coverage as the fundamental concept, we exploit the models of competition between public and private price and quantity in order to show that privatization of the public TV station entails a welfare loss and results in TV advertising becoming more expensive.Keywords: TV broadcasting, imperfect competition, Ramsey pricing, welfare comparison.JEL classification: L11, L82, L33",
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Public and Private Activity in Commercial TV Broadcasting. / Olai Hansen, Bodil; Keiding, Hans.

København, 2006.

Publikation: Working paperForskning

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N2 - We consider a model of commercial television market, where private broadcasters coexist with a public television broadcaster. Assuming that the public TV station follows a policy of Ramsey pricing whereas the private stations are profit maximizers, we consider the equilibria in this market and compare with a situation where the public station is privatized and acts as another private TV broadcaster. A closer scrutiny of the market for commercial television leads to a distinction between target rating points, which are the prime unit of account in TV advertising, and net coverage, which is the final goal of advertisers. Working with net coverage as the fundamental concept, we exploit the models of competition between public and private price and quantity in order to show that privatization of the public TV station entails a welfare loss and results in TV advertising becoming more expensive.Keywords: TV broadcasting, imperfect competition, Ramsey pricing, welfare comparison.JEL classification: L11, L82, L33

AB - We consider a model of commercial television market, where private broadcasters coexist with a public television broadcaster. Assuming that the public TV station follows a policy of Ramsey pricing whereas the private stations are profit maximizers, we consider the equilibria in this market and compare with a situation where the public station is privatized and acts as another private TV broadcaster. A closer scrutiny of the market for commercial television leads to a distinction between target rating points, which are the prime unit of account in TV advertising, and net coverage, which is the final goal of advertisers. Working with net coverage as the fundamental concept, we exploit the models of competition between public and private price and quantity in order to show that privatization of the public TV station entails a welfare loss and results in TV advertising becoming more expensive.Keywords: TV broadcasting, imperfect competition, Ramsey pricing, welfare comparison.JEL classification: L11, L82, L33

KW - x

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KW - Ramsey pricing

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BT - Public and Private Activity in Commercial TV Broadcasting

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