Determinants of profit in the broadcasting industry: Evidence from Japanese micro data

Abstract

We offer an empirical analysis of the relationships between: (a) the structural, operational, and regional characteristics of the businesses of the commercial terrestrial broadcasters that form the core of Japan's existing broadcasting system; and (b) the profitability of these broadcasters. The findings may be summarized as follows:(i) A positive correlation can be seen with audience share, which is a proxy variable for market share, but no clear conclusion can be reached with respect to market concentration.(ii) There is a positive correlation with the scope of household coverage and with income per capita.(iii) The variable showing each station's ability to produce its own programs correlates positively with revenue and negatively with profit.We also find that the variables indicating market conditions, such as the number of households covered and the income level of the area of operation, have a greater effect in determining profits. In the period ahead, it will probably be necessary to think about the proper shape of efficient management for terrestrial broadcasters, including the possibility of mergers or other forms of consolidation. But the results of our analysis indicate that it is also important to consider the standards for prevention of concentration in such a way as to even out the regional gaps in market conditions. And they show that a redrawing of the administrative boundaries in such a way as to even 0167-6245/$ -see front matter Ó the regional operating conditions might even out the revenues and profits of broadcasters and the number of channels that people can watch.

What Influences Advertising Price in Television Channels?: An Empirical Analysis on the Spanish Market

“…Summing up, the most relevant works, such as Kieschnick et al (2002), Brown and Cavazos (2005), Kasuga and Shishikura (2006), and Wilbur (2008), found that audience, advertising time, and demographic characteristics were influential factors explaining advertising price. Some works also considered the degree of competition between private and public channels, and the results suggest some beneficial effect from public intervention.…”

“…Other works (Brown & Alexander, 2005;Kasuga & Shishikura. 2006) considered the market structure and the way in which this structure affects revenues.…”

“…The advertising price should also go up if per capita income, size of broadcast area, and concentration of 18-to 34-year-old viewers increase. Kasuga and Shishikura (2006) examined an empirical model for Japan's broadcasting industry. They examined income and revenues as functions of share, Herfindahl-Hirschman index (HHI; based on audience share), total assets, number of households, income per household, and the number of self-produced programs.…”

“…The results show that rather than competing with programs offered by private TV, ABC and private programs complement each other. 10 Brown and Alexander (2005) and Kasuga and Shishikura (2006) introduced, as well, audience characteristics as the percentages of the population 18 to 34 years old, as well as per capita income.…”

“…Demographic variables affect to ad price No specific hypothesis in the literature The literature considers the demographic composition: Brown and Alexander (2005), Brown and Cavazos (2005), Goettler (1999), Hammervold and Solberg (2006), Kasuga and Shishikura (2006), Wilbur (2008), Withers (2005), Hammervold and Solberg (2006), Kasuga and Shishikura (2006), Withers (2001) …”