Abstract:
This dissertation uses transaction-cost theories to explain
the shift from advertiser control to network control of
programs in the 1950s television industry. In the late
1940s, ratings data revealed that the audience for one
program tended to flow into neighboring programs. This
paper proposes that the threat of ex-post opportunism
discouraged advertisers from making the necessary ex-ante
investments to exploit audience flow. The networks were
better positioned to constrain the opportunism by
consolidating the control rights to production and
scheduling, increasing the contract duration with key
production personnel, and placing more contractual
restrictions on producers.
