How to stop foreign TV eroding local culture

The idea that television can transform culture has been prominent in the political debate, an unregulated television industry being perceived as a threat to cultural diversity. A common argument for maintaining public television is to ensure the supply of diverse and high-quality programming that caters to the entire population – to all communities and cultures.

Politicians who care about local culture often argue that TV imports threaten local diversity. The fear for trade in cultural services is widespread: it lead to UNESCO’s 2005 Universal Declaration of Cultural Diversity granting the products of audiovisual industry the status of ‘cultural exceptions’ – implying that this industry is not subject to free trade.

The fight to preserve this status nearly lead to the breakdown of the initiative to create the Transatlantic Free Trade Area (TAFTA) even before the first round of negotiations had started in June 2013. The French prime minister threatened to use the country’s right of veto to protect its cultural industries. France managed to rally 13 EU countries, and trade in audio-visual services was excluded from the EU negotiating mandate for TAFTA.

The argument for cultural protectionism

Communication scientists have convincingly shown that exposure to television over time cultivates viewers’ perceptions of reality (Shanahan and Morgan 1999). Similarly, the cultural content of TV programs will shape people’s cultural attitudes. If the cultural content of those programmes is predominantly foreign, the local culture will be lost. Therefore, to preserve this culture, local productions have to be favoured.

The truth and the flaw in the argument

There is vast evidence that television affects and changes cultural attitudes. The reception of the Globo signal in Brazil – a network with virtual monopoly power on telenovelas – did not only significantly lower fertility choices but also increased the share of women who divorced or separated (La Ferrara et al. 2012, Chong and La Ferrara 2009). In India the entry of cable TV led to increases in subjective measures of female autonomy and declines in pregnancy rates (Jensen and Oster 2009). Being exposed to television programmes in the Islamic world has an effect on the way people judge the West (Gentzkow and Shapiro 2004).

It is also true that there is some US dominance in the audiovisual industry despite protectionist measures. (In Europe the US dominance is more than 60%, according to a Wall Street Journal article from the 12th of June 2013). However, quotas for home production are often not binding due to high consumer demand (see e.g. Cohen 2005 for Israel, and Papandrea 1999 for Australia).

However, the argument that TV can induce a cultural change and therefore will wipe some cultures off the map is naïve. For one thing, it overlooks the likelihood that people who care about their culture will take this danger into account when deciding on their TV demand. Moreover, an unregulated profit-maximising TV industry is likely to choose optimally the contents of its programming given people’s demand.

Recent research

In a recent paper we develop an economic model of cultural transmission of preferences and examine how different market structures affect the long-run survival of cultural traits (Hauk and Immordino 2014).

In a society with two cultural traits where television (besides providing entertainment) plays the role of socialization, cultural coverage is strategically chosen by a profit-maximising TV industry. Parents decide how much time to invest in socializing their child while the rest of the time the child is left to watch television. If parental socialisation fails, the child is affected by the entire system of messages received by the television programme. These messages consist of the amount of coverage of each cultural trait, which determines the probability that the child will adopt this trait conditional on being socialised by television. Hence, watching television might infect the child with the ‘wrong’ cultural values. This danger is bigger the less television programming reflects the parental culture. Therefore the higher the coverage of the parental culture, the lower is parental socialisation effort, since TV is likely to transmit the right values anyway.

The TV industry exploits this parental behaviour.  The likelihood of cultural extinction is highest under a free-to-air duopoly. To understand why, observe that parents will pick the channel (for their children) that maximizes their utility. This makes specialization by each channel on a single culture a dominant strategy. Both cultures will survive in the long run if and only if the competitors specialise on different traits. When the profitability of one group is particularly large the media industry will cover that group only, leading to no cultural coverage of the less profitable group and its long-run extinction.

When all channels cover the more profitable trait, the incentives to deviate to cover the less profitable trait increase in the number of competing firms. The higher the number of competitors, the stronger the forces pushing towards cultural diversity. Moreover, the capacity of firms to reduce competition by differentiation is amplified whenever TV firms can exploit another variable on which to compete such as a fee or the level of entertainment quality. Therefore, the presence of pay-TV reduces the likelihood of cultural extinction. Pay-TV firms will charge a positive (indeed maximal) price if they specialise on different traits and therefore have less incentive to cover the same trait.

Implications for policy

To summarise, our model predicts that cultural extinction can only occur under very special circumstances. The correct regulatory measures are not protectionist, but ones that allow for competition on several dimensions and increase the number of competitors in the market.

Published in collaboration with VoxEU

Authors: Esther Hauk is a scientific researcher at the Institute of Economic Analysis, Barcelona. Giovanni Immordino is Associate Professor of Economics at the University of Salerno and associate editor of the International Review of Law and Economics. 

Image: Children watch television in the living room of an apartment that is for sale for $4.5 million in New York January 13, 2011. REUTERS/Lucas Jackson