Cable Television Industry in the U.S. INTRODUCTION This research provides an a

THE ECONOMICS OF THE CABLE TELEVISION INDUSTRY

The economics of the cable television industry are considered in three contexts. These contexts are (1) the conversion of a public good to a private good, (2) the structure of the industry, and (3) problems confronting the industry.

The initial consideration with respect to the economics of the industry lies at the theoretical level, wherein the existence of the industry transformed an essentially public good into, at least partially, a private good. Public goods are those which, because their benefits or use may not be withheld from a single person without withholding them from all persons, must be supplied communally (Gwartney, Stroup, & Studenmund, 1990). National defense, street lighting, general police protection, and scientific theory are oftcited examples of public

1 2goods. A television signal broadcast over the airwaves without any form of interference of reception is another example of a good which, if not a pure public good, is at least a near, or quasi, public good.

The definition of public goods does not demand that the actual provision of the good must be performed in the public sector. As an

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mit the viewing of a program at a more convenient time. These tapes may be reused to copy additional programs, once the home viewer no longer desires to retain a copied program. None of the revenues from the sale of blank video tapes goes to the copyright holders of the programming material copied on to the tapes by home viewers. The cable television industry, while it is a relatively young industry, is approaching the mature stage of its life cycle. In the United States, the three national commercial television networksABC, CBS, and NBCvirtually controlled the industry during its first three decades. The rapid introduction of new players into the industry, however, resulted in the beginning of an erosion of the power of the networks. The audiences of the networks are stabilizing and/or reducing in size, while those of the pay television companies, the television superstations, public television, the independent television stations, and cable channels are, in most instances, all growing. In this context, the market shares of the television viewing audience are shifting away from the networks and toward the other players indicated. As the cable television industry has developed, it has, in accordance with the gene
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Approximate Word count = 3685
Approximate Pages = 15 (250 words per page)

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