Media Briefings

PRESERVING CULTURAL DIVERSITY IS BEST DONE BY COMPETITION NOT PROTECTIONISM: New analysis of parents, TV and cultural change

  • Published Date: September 2014

An unregulated TV industry is not a threat to cultural diversity as long as there are plenty of competing channels and programme-makers. That is the central conclusion of research by Esther Hauk and Giovanni Immordino, which is published in the September 2014 issue of the Economic Journal.

Their analysis concludes that ‘cultural extinction’ can only occur under very special circumstances. This implies that TV programmes should not be classified as ‘cultural exceptions’ and that the correct regulatory measures are not protectionist but ones that promote an increase in the number of competitors in the market, including pay-TV.

In 2005, UNESCO’s Universal Declaration of Cultural Diversity granted TV programmes the status of ‘cultural exceptions’. This means that they are not subject to free trade and it arises from the fear that an unregulated TV industry is a threat to cultural diversity.

While there is no doubt that TV can induce cultural change, the new study suggests that the argument that it will therefore wipe some cultures off the map is too simplistic. For one thing, it overlooks the likelihood that people who care about their culture will take this danger into account when deciding on their TV demand. Moreover, an unregulated profit-maximising TV industry is likely to choose optimally the contents of its programming given people's demand.

The new study takes these strategic choices into account and shows that the fear of cultural extinction expressed by some policy-makers is exaggerated. Cultural extinction is not impossible but stoppable by sufficient competition. The researchers therefore conclude that TV programmes should not be classified as ‘cultural exceptions’ and that public broadcasting is rarely justifiable on cultural grounds.

Their research develops an analytical model of cultural transmission in a society with two cultural traits, where TV, besides providing entertainment, plays the role of socialisation. Cultural coverage is strategically chosen by a profit-maximising TV industry. Parents decide how much time to invest in socialising their child, and the rest of the time the child is left to watch TV.

If parental socialisation fails, the child is affected by the entire system of messages delivered by the TV programmes. These messages consist of the amount of coverage of each cultural trait, which determines the probability that the child will adopt this trait conditionally on being socialised by TV.

Hence, watching TV might infect the child with the ‘wrong’ cultural values. This danger is bigger, the less TV reflects the parental culture. Therefore, the higher the coverage of the parental culture, the lower are parental socialisation efforts since TV is likely to transmit the right values anyway.

In this analysis, the likelihood of cultural extinction is highest under a free-to-air duopoly. To understand why, note that parents will pick the channel (for their children) that maximises their utility. This makes specialisation by each channel in one single culture a dominant strategy.

Both cultures will survive in the long run if and only if the competitors specialise in different traits. When the profitability of one group is particularly large, the media industry will cover that group only, leading to no cultural coverage of the less profitable group and its long-run extinction.

When all channels cover the more profitable trait, the incentives to deviate to cover the less profitable trait increase with the number of competing firms. The greater the number of competitors, the stronger will be the forces pushing towards cultural diversity.

The capacity of firms for reducing competition by differentiation is amplified whenever TV firms can exploit another variable on which to compete, such as a fee. Therefore, the presence of pay-TV reduces the likelihood of cultural extinction. Pay-TV firms will charge a positive price if they specialise in different traits and therefore have fewer incentives to cover the same trait.

ENDS

Notes for editors: ‘Parents, Television and Cultural Change’ by Esther Hauk and Giovanni Immordino is published in the September 2014 issue of the Economic Journal.

Esther Hauk is at the Institute of Economic Analysis, Barcelona. Giovanni Immordino

Is at the Università di Salerno (https://sites.google.com/site/gimmordinoecon/home).

For further information: contact Giovanni Immordino on +39 08 99 63 165 (email: giimmo@tin.it); or Romesh Vaitilingam on +44-7768-661095 (email: romesh@vaitilingam.com; Twitter: @econromesh).