A｀ la Carte Regulation in CATV Industry and Its Effect on Program Selection and Social Welfare
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This paper examines a model of program choice and packaging strategies in CATV. It is shown that a cable operator packages a programming channel into a basic channel package and maximize its viewership when a per viewer advertising revenue is sufficiently large. This paper also shows that specialty programs tend to be shown on an expanded basic channel, that is, packaging channels targeted to the viewers with a refined taste helps a specialty program to be shown on CATV. With a basic channel package alone, a cable operator would not offer a specialty program. The model is also used to analyze the effects of a ｀ la carte regulation mandating cable operators to offer viewers the opportunities to buy channels separately on program selection. The results indicate that the regulation may facilitate specialty programs to be shown on CATV; however, it reduces social welfare.
Abstract
This paper examines a model of program choice and packaging strategies in CATV. It is shown that a cable operator packages a programming channel into a basic channel package and maximize its viewership when a per viewer advertising revenue is sufficiently large. This paper also shows that specialty programs tend to be shown on an expanded basic channel, that is, packaging channels targeted to the viewers with a refined taste helps a specialty program to be shown on CATV. With a basic channel package alone, a cable operator would not offer a specialty program. The model is also used to analyze the effects of a ｀ la carte regulation mandating cable operators to offer viewers the opportunities to buy channels separately on program selection. The results indicate that the regulation may facilitate specialty programs to be shown on CATV; however, it reduces social welfare.
참고문헌 (19)
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