Abstract

The media landscape is subject to substantial technological change. Given these changes, we assess whether a case for public service broadcasting (PSB) can still be made. The analysis leads to conclude that this is increasingly difficult. The main reason for this conclusion is that, due to technological developments, many market failures in the broadcasting industry are no longer relevant. The broadcasting market thus functions more and more like a normal market. This implies that the allocation tends to the efficient outcome, as long as consumer valuation is properly accounted for. This is not the case when there are externalities and possibly not when it comes to valuing quality. In the presence of these market failures, an efficient allocation is not warranted in the broadcasting industry. It is these remaining market failures that could potentially provide a rationale for a future PSB.

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