From: "Nick Arnett" <[EMAIL PROTECTED]>
To: "Brin-L" <[EMAIL PROTECTED]>
Sent: Tuesday, August 07, 2001 9:33 PM
Subject: RE: Questioning "free" enterprise
>
>
> > -----Original Message-----
> > From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On
> > Behalf Of Robert Shaw
>
> [snip]
>
> > Any problems with newpaper monopolies in the US are not due solely
> > to the free market, but must be caused in part by the social factors
> > differing between it and the UK.
>
> That doesn't follow at all, since the United States and the U.K. are not
> politically or economically identical. They are far from identical with
> regard to newspaper monopolies.
That's what I said.
> Excerpt: "... [t]here are special provisions for press concentration under
> the 1973 Fair Trading Act. A transfer in ownership of a newspaper with
more
> than 500,000 copies daily circulation must be approved by the Minister for
> Trade and Industry. The Minister can also block a transfer of a newspaper
> with less than 50,000 daily circulation. In making a decision, the
Minister
> must take into consideration the public interest (this is called a 'public
> interest test')."
>
> There's more. This is very, very different from the U.S. situation.
Nonetheless the UK newspaper market is still free. New newspapers
have been established recently, which wouldn't happen under anything
clsoe to a monopoly.
The regulations you cite do not prevent newspapers driving the
competition out of business, as has also happened, nor do they
prevent them from enjoying the economies of scale you cited as
the source of US newspaper monopolies.
Anyone can start a new newspaper, all they need is money, and
government will not stop a newspaper from going under.
In part it's due to specialisation. Not everyone buys newpapers.
A single monopoly newpapers might have a circulation of 40%
of the total market, becuase it's trying to appeal to everyone.
Two competing newspapers in the same market would have lower
individual circulations, say 30% each but with no overlap. Trying
to poach readers from each other would only lead to losing readers
put off by the increasing lack of focus.
Such a situation can be stable, even in a completely free market,
and advertisers may even pay better despite the lower circulation
since they get better targeting. This works as long as the total
size of the market is large enough as it is in the UK.
If the market is big enough to segment that way a free market
won't automatically lead to monopolies, even in the complete
absence of regulation.
--
Robert
