The effect of regulation on programming strategies of radio broadcasting

Abstract

In this paper, I present an empirical analysis of product differentiation using a dataset on radio broadcasting in major radio stations in France from year 2013 to 2016. From 1994, French government stipulates that a certain proportion of music in French, at least 40 percent, should play on radio stations. The regulation was introduced as part of efforts to protect and promote cultural diversity. Radio stations argued that the regulation imposed a constraint upon the programming decision and forced them to branch out and play less well-aired content. The regulation has an effect on the local ratio broadcasting, giving rise to changes affecting stations' programming decisions. I compute a measure of product similarity index called cosine similarity, which allow me to estimate program differentiation in a multi-characteristics space. The results suggest that stations complying with the regulation are more likely to broadcast similar program contents than noncomplying stations.