The Value of Television Time and the Prospects for New Stations

by Stanley Besen


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Analyzes the determinants of program rates of television stations. Rates are those charges for the use of station time during which the purchaser supplies his own program. They therefore represent the station's compensation for the use of its time. Factors found to affect these rates are the number of homes with television sets in the station's market, whether the station operates on VHF or UHF, whether it is a network affiliate or independent, and the nature and number of the station's competitors. The estimating equation developed is used to explain the rate structure within television markets as well as to predict the effects of alternative policies to improve the prospects for new stations. The principal conclusion is that policies to eliminate the UHF handicap will improve the prospects for new stations but that the absence of a fourth network with which to affiliate may still leave many such stations unprofitable.

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