Microeconomic theory Essay
The term ‘Competition’, in economics, states and emphasizes the idea that the agents of the economy i. e. firms and individuals strive for the given market to get the majority chunk for themselves with their limited resources. As per the dictionary meanings, Merriam-Webster, competition means “the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms. ” It was described by several economists as the allocation of factor inputs, capital and productive resources to their most beneficial and highest economic value uses and encourages efficiency.
Microeconomic theory however, distinguishes between the two types of competition i. e. perfect competition and imperfect competition. Perfect competition has such a huge number of market players that an individual cannot by any means have an impact on the overall market. The condition of imperfect competition has got several categories based on their market structure but one thing which they share in common is that their decisions and actions can have some or in other cases significant impact on the industry dynamics.
Allocation of resources effectively, however, is much more efficient than perfect competition. Competition, according to the many accepted theoretical concepts, urges commercial firms
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Competition in any industry is better for any industry for the sake achieving better quality and efficiency. Media industry has recently been in a boom along with the ground breaking technological advances and the declining cost of Information and communication Infrastructure make it acquirable for many developing countries and private enterprises as well (Taylor, 2003).
The merits of free and unbiased media, however, are yet to be justified for the reason of its decency and ethical responsibility that the currently present media giants should be fulfilling. There can be a lot of advantages derived from fair competition in any industry for good economic growth of the nation as a whole. Some of these benefits are discussed below. Competition does makes the market more efficient by the fact that all the firms in the industry, given a fair competitive market, are faced with some given market constraints such as the price, market size and the present competition.
Thus they develop and choose the best possible and most economically efficient methods of production to achieve the highest yield possible; hence enhancing the productivity of the scarcely available factors of input putting them to their best usage. A market open for new entrants and thus fair competition is basically a representative of free economy where firms and individuals can compete with negligible cost. Therefore, when there are new entrants in the sector, the total product or output of that sector and correspondingly of the economy is increased thus enhancing the productivity of the factors of input of the very same economy.
Competition actually facilitates and encourages good governance and fair market practices instead of the exploitation that prevails in sectors with imperfect completion such as monopoly or oligopoly. Governments however, should be vigilant about the actions taken by the market players to deter any coalition, promote a fair competitive environment and protect consumers. Sometimes however, competition is an illusion created by politicians to facilitate favoritism. This is an accepted truth that free fair competitive environment is good for the socio-economic benefit of all.
The public media had traditionally been the inherited asset of solely the government(s) of their respective countries. Thus television being the most innovative and mass reaching medium of the 20th century was no doubt one of the most valuable weapon in the arsenal of any government. It could be used to provide information which ever was thought necessary (and not dangerous for the ruling governments). It was used to create grounds for political transforms, to create and to deter social turmoil and to create awareness or distort public opinion.
Before going into further in depth analysis and details about the television, we should first attempt to identify the major categories into which these TV channels can be sorted for clearer explanation and simplification (Casey, 2002). The three major types of TV channels are; Just like its name, these channels are commonly known as free channels. Viewers do not pay for the TV shows and various programs they watch, in the way similar to that of viewers who visit a cinema i. e. known as ‘Pay As You Go’.
However, these television channels still have certain costs and expenses thus requiring a lot of money to operate and the owners or investors of these channels obviously want to make profits as well. For this purpose, these channels use various other indirect ways to charge viewers to earn their revenue. Commercially owned television channels are the ones which provide programs, shows, news, and entertainment for its viewers. They earn revenue mainly by advertising and sponsorships.
Companies pay a great amount of money to advertise too many large of such channels for huge viewing audiences. These channels are mostly rated on their level of viewership, popularity and quality of content which combined makes up the basis for setting up their tariffs for ads and that how they select different bands of prime times and tariffs plans for ads during their transmission (Treadway, 2005). Public channels (or government-owned television channels) are also known public broadcasters.
For such channels, it is rather difficult to ear revenues and raise funds through any sorts of commercial advertising to cover their humungous costs as opposed to other commercial TV channels. Our focus of attention and topic for discussion is mainly this category and its justification against that of the huge amount of other commercial channels and their significance on the society at large. Public channels have often been seen as the medium used by the government to deliver certain specific content.
They have also been used for programs different groups in the community that are specific to those minorities only, they promote programs of public awareness regarding certain social issues, epidemics and other types of key information that is perhaps of high value but no one actually is willing to pay for such information. Just like, police department, postal service, street lights, etc. public television channels are thus another type of ‘public good’ that benefits majority of the population but none will be willing to pay for it individually.
These channels seldom get any high value ads and therefore are highly dependent upon public funds or the government budgets allocated to media and information. Despite all the cost factors and commercial criticism and that of free media, many of the broadcasters have a consensus on the fact that proliferation of TV media to private enterprise for commercial purposes has had its own benefits but had tremendously affected the quality and reliability of content and/or information provided to their viewers (Kruger, 2003).
This is no doubt very true that modern TV media has had been a positive push to the traditional Public TV channels, but the increasing number of channels and their neck breaking fight to gain the maximum viewership out of the limited given market and their efforts to build a critical mass of loyal viewers sometimes makes them do things which might not be socially or economically feasible.
Many people have debated the responsibility and duty of public media and holds them too accountable to public at large because their funds are derived from the tax money that he public pays. However, the charges that consumer rather viewers have had to pay for the commercial channels have also been very high. The rule of demand and supply might only be applicable to the ads and their tariffs, but TV operations at large are not bound by this fundamental.
TV media is therefore an exception and despite the fact that media should be free to provide authentic and complete information, Television should be a public commodity and this way it’s better for the masses as every cannot afford to have the information and content via commercials means and for strategic purpose as well, media is something which should be operated as a public service, thus defying all laws of demand and supply via competition in this industry.
The private enterprise, with the basic assumption of its profit maximization model, will tend to ignore the social gains and positive externalities and is worried about only about its own economic gains and profits. Thus Television media, being a public commodity or service has lesser cost to its users/consumers/viewers if it is operated as a monopoly by the state despite all the economic merits of competition.
Works Cited Kruger Stephen, Rayner Philip & Wall Peter. Media Studies: The Essential Resource (Essentials): Routledge, 2003. Taylor Lisa & Willis Andrew. New Media Studies: Blackwell Publishers, 2003. Casey Neil, Calvet Ben, et. al. TV Studies: Routledge, 2002. Treadway Tyler. TV war in Little Rock tops media news: Arkansas Business Journal, 2005.