Factors Influencing the Value of Television Time: an Analysis Over Time (Broadcast Economics).

Abstract

Issues of value are fundamental to any consideration of social and /or economic institutions, forming the basis for most behavior in an economic society. As economic enterprises, the primary source of value to broadcasters must be considered to be that which provides the vast bulk of revenues for the industry. Thus, the fundamental source of value in the broadcasting industry, its primary economic good, was identified as the access to audience provided through the sale of broadcasting time. The nature of audience access, or broadcast time, as an economic good was discussed and developed through a consideration of existing literature and research. From this, a simple theoretical model was derived, based upon the economic models of supply and dem and , which could be used to consider various influences upon the value of broadcast time (reflecting access to audience). A series of factors thought to influence the value of broadcast time were identified, including audience size, market size and characteristics, frequency, network affiliation, cable penetration, and Presidential election campaigns. The process and direction of influence were considered and developed based upon both prior research and the application of supply/dem and model in order to derive a set of hypotheses. Using a data set based on a census of television stations and markets over the period 1974-1984, a series of explanatory models were developed to examine the influence of various factors upon the value of broadcast time (reflecting access to audience). In general, the results of the data analysis supported the various hypotheses as to the influence of the factors considered. Audience and market size exerted a positive influence upon value, as did Presidential election campaigns; on the other h and , presence in the UHF b and and lack of a network affiliation exhibited negative impact. Cable penetration was found to have a negative influence for VHF stations, but a positive impact upon the value of time on UHF stations. The nature of the influence of competition (with relative competition appearing more influential than absolute competition), however, was somewhat unexpected, as was the strength of the influence of cable penetration.