NCPA - National Center for Policy Analysis

Digital Video Penetrates National Programming Quotas

March 3, 2003

Popular culture has become one of America's biggest exports. Every year the United States sells more than $60 billion worth of music, books, movies, television programs and computer software to consumers abroad. Over the past few decades many governments around the world have viewed this trend with alarm.

In an effort to preserve their cultures, countries have imposed quotas that limit the number of U.S.-produced films and programs that can be shown on television.

  • In France, for example, at least 60 percent of broadcast time must be European programming -- of which at least two-thirds must be French.
  • In Australia, at least 55 percent of the schedule from 6 a.m. to midnight is set aside for Australian shows and films.

But new technologies for distributing movies and television shows are overwhelming these national barriers by offering subscribers an unregulated mix of programming dominated by American shows.

  • Widely available in Europe and some parts of Asia, direct broadcasting by satellite (DBS) allows consumers to receive programming through a satellite dish not much larger than a dinner plate.
  • Video-on-demand, which is made possible by the use of digital video, pokes a hole in the quota system because it is based strictly on viewer choice.
  • The ultimate blow to broadcast quotas, however, would be the transmission of video over the Internet; however, this technology is not quite ready for prime time.

One reason foreign broadcasters use a lot of American programming -- despite government subsidies for domestic productions -- is because license fees for U.S. television shows are typically one-third to one-tenth of those for shows produced elsewhere.

Source: Harvey B. Feigenbaum, "Digital Entertainment Jumps the Border," Scientific American, March 2003.


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