E sccr/21/2 Original: English date: August , 2010 Standing Committee on Copyright and Related Rights Twenty First Session Geneva, November to 12, 2010

V. FUNDAMENTAL ECONOMICS OF BROADCASTING AND CABLECASTING

131 The very term ‘broadcasting’ integrates the concept of size with the idea of communicating to a large (broad) audience. In order for broadcasting or cablecasting to achieve economic efficiency, an aggregation of a sufficient number of listeners or viewers is necessary. Because costs for facilities, equipment, and operations are relatively fixed, economies of scale in service are related to audience size.

132 Absolute size of the target audience (10 million persons, for example) rather than relative size (the percent of the population) is a central factor for producing inefficiency or efficiency. Size in geographic area and population density also influence efficiency because they affect the infrastructures necessary for providing broadcasting or cablecasting services and may create needs to provide localized services in different locations.

133 These economic efficiency factors are why urban areas tend to have more infrastructure and communication services of all kinds—electricity, sewers, telecommunications—than rural areas and why minorities (usually defined in relative size terms) also may fail to reach the absolute size necessary for efficient broadcasting services to be provided.

134 Private firms become interested in providing services when efficiency exists and can be used to produce commercial gain; in the absence of commercial sustainability, public intervention in the forms of public broadcasting, state broadcasting, volunteer community broadcasting, subsidy, public access channels, or other mechanisms may be necessary to achieve some or universal service.