Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

Media Content as a “Public Good”

Posted on | February 23, 2011 | No Comments


Media products are sometimes referred to as “public goods” because these products are not significantly “used up” in the process of consumption, and each additional user incurs little additional (marginal) cost. Unlike traditional products like a hamburger that is bit into, chewed, swallowed, and digested, media content is generally not destroyed while being consumed. Although the timeliness of media content is often an issue, the consumption of media does not deplete it.

With traditional public goods like a road or a park, the costs associated with the additional driver on a highway or your child enjoying the playground are minimal. With media content as well, additional consumers are served without incurring much expense. An additional radio listener, for example, would not impose even a negligible cost on the radio station. Likewise, one more click on a website would not cost the owner very much.

Economists like to talk about two characteristics of goods and services, called rivalry and excludability. Rivalry is sometimes called subtractability. When someone purchases a good that is highly rivalrous, it is consumed entirely by that person. These are also called private goods in that they are removed from collective or shared use. These are the ideal goods for economists because these products are “well-behaved” in that they fit nicely into their economic models and are easily priced. A mobile phone almost always has a single owner until it breaks or becomes outdated.

Other goods are less rivalrous such as going to a water park. Labor is utilized, water evaporates, but for the most part, the park remains essentially the same after the family packs up and goes home. Radio stations emit their programming with a signal that is not used up by a commuter listening to music (and ads) on their way home.

The other issue is excludability. A water park usually has enough fencing and security to keep those who do not pay away from its pools and rides. A beach would be more difficult, and many communities make sure that rich owners of beachfront properties do not restrict surfers, swimmers, and other beach users from accessing the beach. These “common goods” can be subject to congestion as more people use them.

The “nonexcludability” criteria of a public good takes into account the costs associated with keeping nonpayers out of the system. It is very difficult to keep a car off a road or a kid out of park, just as it is not feasible to keep a viewer from watching a TV show on broadcast TV. An interesting case is the economics of knowledge, which is not consumed, but is it excludable? And what conditions would restrict others from acquiring it?

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Anthony

Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, and global communications.

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  • About Me

    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

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