Viewer's willingness to pay and programme choice

Date of publication: May 1, 1994

Abstract:

As background to planning for the multi-channel interactive future we address two linked questions : What is the demand for different type of programmes? How much would viewers be willing to pay directly for their habitual channels? The paper draws on the wide range of well-established, empirical evidence about consumer behaviour in the UK and other television markets. We note the underlying regularity of much of this behaviour, which is reviewed in the broader context of consumer behaviour in markets for other goods and services. Our research on viewers’ willingness to pay, involving a single-price package, demonstrated a remarkable price inelasticity for UK terrestrial channels, reflecting their high reach and hours viewed. UK (and other) television is currently underpriced. We conclude that rapid, fundamental change is unlikely to occur in the broadcasting as in other markets in response to new technological opportunities, and that UK viewers will continue to want to watch their current range of programme types. Viewers are prepared to pay for quality services they want to watch, including both existing and new channels.

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