Friday, January 11, 2013
Stefan Bechtold, ETH Zurich, has published The Fashion of TV Show Formats. Here is the abstract.
Over the last years, a vibrant global market for TV show formats has developed. New game show, casting, soap, telenovela, documentary and other formats are sold to broadcasting stations in dozens of countries, leading to a worldwide multi-billion dollar industry. As an analysis of U.S. and European intellectual property law demonstrates, TV show formats are difficult to protect by intellectual property rights. Standard theory would predict that in the absence of intellectual property protection, the TV show format industry has insufficient incentives to invest in creative innovation. This article presents a novel theory to explain why the TV show format market is thriving despite a low level of format protection. On the supply side of the industry, demand for TV formats is hard to predict, return on them is highly skewed, and market participants are both developing original formats and imitating others’ formats. On the demand side, TV formats are experience goods, and TV viewers sometimes prefer familiar products. As a result, the TV show format market is subject to herding effects on both sides of the market. The interaction of supply-side and demand-side herding leads to fashion cycles in TV show formats. The TV show format industry uses the limited protection against format imitation, but has adapted to the fashion cycle. This article tells the story of how an industry has developed institutions enabling it to cope with uncertain demand and unpredictable profitability, while benefiting from limited appropriability of innovation and from the fashion cycles which underlie the innovative process.
Download the paper from SSRN at the link.