Does regulation of audiovisual content work – and is it necessary?

This paper discusses the need for regulation of audiovisual services content in the light of recent developments in information technology. The European Community as well as the Norwegian government regulates the content of television broadcasting with the objective of protecting cultural heritage, promoting diversity, independent production and local content. It is argued that empirical evidence suggests that the local content regulations are not binding and that local audiovisual service providers have increased their market shares also in unregulated markets. A simple model predicts that as the number of available services expands, the market share of local providers increases. A shift towards shorter services (single songs rather than music albums, video clips rather than movies) is also predicted while quality services may suffer. The results suggest that direct regulation of services content in audiovisual services is neither necessary nor effective.