Quiz 1: Case study Evidence A 1 of 3

1. How might we understand the concept of a ‘Public Service’ broadcaster in traditional economic terms?

2. Why might it be difficult to say how

great or small these benefits are?

Evidence A 2 of 33. Why is the ‘compulsory annual

licence fee’ a regressive tax? 4. What features of the Licence Fee

makes it less regressive than a simple tax per person?

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Evidence A 3 of 35. What other examples are there of

Sky’s and Virgin’s business model, whereby income is generated by both direct purchases of the product and also advertising?

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Evidence B 1 of 36. How does Evidence B illustrate the

chain of distribution? 7. Why then don’t we have to pay to

watch these channels on YouTube?

Evidence B 2 of 3

8. Why might advertisers prefer ‘pre-roll’ advertisements to the traditional ‘alongside’ advertisement?

9. What is the danger of too many

lengthy pre-roll advertisements for YouTube?

Evidence B 3 of 310. Why challenge does YouTube

present to conventional TV networks, such as those mentioned in Evidence A?

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Evidence C 1 of 3

11. What is the (brief) history of the licence fee?

12. What is the fundamental justification

for the licence fee?

Evidence C 2 of 313. What is the fundamental objection

to the licence fee? 14. What change in market structure

presents a challenge to the Licence Fee?

Evidence C 3 of 315. What sort of tax is the Licence

Fee?

Evidence D 1 of 316. The ‘Switchover Help Scheme’ is a

scheme to help the registered disabled and over-75s switch from analogue to digital television. Given that the take-up for this scheme was less than anticipated, why could the BBC not simply spend the money on its other Public Service obligations?

17. Why did the BBC argue for the surplus to be given back to the public?

Evidence D 2 of 318. Why did Ofcom suggest it the

surplus be given to ITV and Channel 4?

Evidence D 3 of 319. How would Ofcom’s suggestion

have radically changed the nature of the Licence Fee?

20. What is the fundamental

argument in favour of Ofcom’s proposal?

Evidence E 1 of 321. How does the decline in the BBC’s

market share compare with that of the main channels funded by advertising?

22. What is the fundamental

explanation for this decline?

Evidence E 2 of 323. What is the name for the many

niche providers, who collectively take away market share from the market leaders?

24. To what can we attribute the

growth of this long tail?

Evidence E 3 of 325. What further technological

advances are currently multiplying the number of channels yet further?

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Evidence F 1 of 326. Why would the Competition

Commission get involved in a market like VOD, which is still in its formative stages?

27. What was the key fact that led to

project Kangaroo being turned down?

Evidence F 2 of 328. What is the flaw in the argument

in the final paragraph, which points at ITV’s and Channels 4’s current financial difficulties?

29. Why was BBC Worldwide involved

rather than the BBC?

Evidence F 3 of 330. What is the best argument made

here in favour of allowing the merger to go ahead?

Evidence G 1 of 131. How does President Sarkozy’s

proposal illustrate the mixed motives of so many major political decisions?

32. Why might the EC Competition

Commissioner want to minimise state subsidies for Public Service broadcasting?

Evidence H 1 of 4

33. The table shows that the Licence Fee model, as a means of supporting Public Service broadcasting, is very common across Europe. What is the historical explanation for this?

34. What is the theoretical benefit of

Licence Fee funding compared to a government grant?

Evidence H 2 of 435. What is the obvious benefit of

allowing advertising on Public Service (i.e. State) TV?

36. What is the obvious drawback of

allowing advertising on Public Service TV?

Evidence H 3 of 437. Which three countries in the Table

rely entirely on the Licence Fee to fund Public Service broadcasting?

38. Denmark and the UK are the only two

countries whose Public Service channels rely entirely on a Licence Fee. Why, other things equal, does Denmark’ s Licence Fee need to be over 50% higher?

Evidence H 4 of 4

39. Does the Table provide support for the principle of funding Public Service broadcasting through a Licence Fee?

40. Does Public Service broadcasting

have to be funded out of taxation i.e. by a Licence Fee or a government grant?

Evidence I 1 of 141. Does this information support the

idea that TV viewing is a demerit good?

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