No 4: Programming and Direct Viewer Payment For Television.

Mónica Herrero. 2003.

The implementation of new technologies, the inminent establishment of the digital era and the proliferation of different systems of distribution have greatly altered the economics of commercial television. The introduction of direct viewer payment has also changed the concept of television as a public good. This work analyses the implications of direct viewer payment in the programming and the relationship with the audience.

The study of the implications of direct viewer payment on the programming offer reveals the nature of the products by which people are eager to pay for: popular programming such as films and sport events. Thus, the television schedule of a pay television channel consists of exclusive programming, general programmes as commercial television ones and minority programmes.

The relationship with the audience demands the distinction between potential subscribers and subscribers. The introduction of direct payment modifies both relationships. With the potential subscribers, the pay television channel starts new forms of promotion in the television market, such as sales promotion. Regarding subscribers, the contractual relationship opens a new environment of commercial relations addressed to the satisfaction with the product.

Table of contents

1. Introduction and concepts

1.1. The broadcasting commodity

1.1.1. The immaterial character of the broadcasting commodity

1.1.2. The broadcasting commodity as a public good

1.1.3. The broadcasting commodity and its dimensions of content, form and logic

1.2. The relationship with the audience

1.2.1. Interpersonal relationship and commercial relationship

1.2.2. Direct payment, contract and subscription

2. Essentials of direct payment for television

2.1. Pay television versus paying for television

2.1.1. The funding of public service broadcasting

2.1.2. The funding of commercial television

2.1.3. Duplication of contents

2.2. The pay-television channel: economic features

2.2.1. Are television products still public goods?

2.2.2. Subscription, adhesion and freedom

3. The programming of a pay-television channel

3.1. Making exclusive programming from popular programmes

3.1.1. Programmes and subscriptions: consumer surplus and monopoly

3.1.2. Films as a cornerstone: vertical integration

3.1.3. Football rights

3.2. Other programmes and the Peculiarities of Scheduling

3.2.1. Minorities and own programming

3.2.2. The special case of non-encrypted programming

3.2.3. Repetition and multiplexing techniques

4. The Relationship with the Audience

4.1. The commercial relationship: promotion or looking for subscribers

4.1.1. The investment in advertising

4.1.2. Sales promotion activities

4.2. The relationship with the subscriber

4.2.1. Creating the necessary infrastructure to establish a relationship

4.2.2. Avoiding churning and recuperation activities

Some conclusions. The pay television channel as a transition model to the multichannel offer.

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