Claus Thustrup Hansen and Søren Kyhl

"Pay-per-view Broadcasting of Outstanding Events: Consequences of a Ban"

JEL codes: L50, L82
Keywords: Pay-per-view television, Commercials, Regulation

Abstract:  A regulatory ban on pay-per-view broadcasting of certain outstanding events has recently been implemented in the EU. This paper analyses the consequences of such a ban when the alternative is financing the events purely by TV-commercials. The result on total surplus is ambiguous and, hence, does not by itself justify a ban. However, a ban increases consumer surplus and reduces the proceeds to the owner of the broadcasting rights. This is consistent with the motivation for the ban given in the EU Directive, which focuses on the welfare of the viewers.