Friday, 18 April 2014

On Public Service Broadcasting

Chicago Booth's Matt Gentzkow was awarded the Clark Medal yesterday. In light of his famous paper with Jesse Shapiro on media bias, I thought I would offer my thoughts on the related issue of public service broadcasting. Because the slant (if any) of such outlets may function according to the same basic principles as those found by Gentzkow and Shapiro.

What the Gentzkow-Shapiro paper does is to scrutinize newspaper articles for phrases which show up disporportionately in Republican and Democratic speeches in the Senate. Estimating political slant in this fashion, they find that the political orientation of a newspaper is explained mainly by the preferences of its readers, rather than by the views of its owners. The consumer is King. It seems to me that the same should apply to state television.

In most of the world, the state is an active operator in the television business. This is usually funded by licence fees for owning a TV set, or through income taxation. Common arguments in favour are that such media outlets are free from commercial influence and interests and thereby provide more objective news and better coverage of high culture and other forms of entertainment which might be too narrow for commercial alternatives.
Given the results of Gentzkow and Shapiro, I would be inclined to believe that tax and licence payers get most value out of public service broadcasting when it closely matches their viewing preferences. Because a political decision could do away with public service broadcasting, this media outlet is sensitive to the views of its targeted audience just like newspapers are sensitive to the sentiments of their intended readers. In an efficient market for public policy, this should mean that mostly rather popular programmes end up reaching viewers of state television. It two politicians are otherwise the same, one of them improves his chances of election by proposing a way for the country's public service broadcasting company to show more intensely-valued TV shows. This makes it hard to see the difference between public service broadcasting and private alternatives.

If the argument in this post is sound, the real reason behind public service broadcasting cannot be the stated reason. (Or, maybe I simply have not heard the true stated reason yet.) Maybe propaganda becomes easier? At several margins, politicians could prefer some (indirect - since public service broadcasting is usually formally independent) control of what is said in the media to audience surplus. Politicians want more propaganda the greater are the benefits from influencing behaviour relative to the losses associated with failing to maximize audience suplus. What other rationales for public service broadcasting are there?

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