| Multichannel services such as cable television provide increased viewing options to TV viewers. However, the technology is not the only factor that determines the range of programming-options in television. This dissertation explores economic factors determining the number of channels programmed in a cable television and those affecting the composition of system programming. By examining the forces shaping the current media, likely constraints on the new media can be better understood.The composition of basic system programming does not show much variation from one system to another. Only a small number of networks are added to a system based on a distinctive local preferences, subject to the availability of channel capacity. Little variation in the network selection implies that there is a common taste for television programs over different cable system areas.Performance of programming networks seems to be path dependent. The coverage of early entrants gives them an advantage over later entrants that leads to a natural sorting into high reach with big budget networks and low reach with low budget networks. Early entrants improve programming quality and sharpen their targeting through experience.By applying a theoretical framework developed to explain newspaper content diversity, an empirical model determining the number of channels in a cable television is set up and tested. Market size is one of the key determinants of the number of channels of programming supplied by the operators. Local market, system, and population characteristics that affect the costs of running a system and its revenue potential are also included in the model. The major hypothesis that the number of channels of programming carried by a system increases with the subscriber base is supported by data and a simultaneous relationship between the number of channels and the number of subscribers is confirmed. As in the case of other media such as motion pictures and newspapers, market size is an important factor determining the number of channels viable in each market. |
