How a Television Monopoly Ended in Mediocrity, Article Review Example

In his article, John Kay provides a brief review of how monopolies work. The author refers to the example of the book trade to explain the potential benefits and inconsistencies of the monopolistic markets. Kay writes that British consumers alone spend around £2bn every year on books, and more than 70,000 titles are published to target these consumer markets. If the book trade had become a monopoly, businesses working in the book market would have concentrated on producing a few high quality titles to satisfy the current demand (Kay). Intellectuals would enjoy such a monopoly because it would promote quality and integrity (Kay). Today, however, competition is the definitive feature of most markets. Businesses consider competition as the basic prerequisite for continuous profitability and success. Competition results in the production of multiple low-quality products, and monopoly is often regarded as a form of business discrimination. In case of modern television, producers “produce everything for which there is even a small demand” (Kay) and focus on low-budget mass consumer segments. License-fee-television remains the basic obstacle in the competitors’ way to better quality of TV products (Kay).

It should be noted, that the monopoly debate is not new: throughout years, professionals and scholars in microeconomics sought to identify the benefits and drawbacks of monopolistic markets. Kay’s article confirms that monopoly is not a negative phenomenon in itself: in particular economic conditions, monopolies can better satisfy consumer needs. What conditions must exist to make monopolies relevant and justified is difficult to define, but it is clear that businesses and professionals in microeconomics must evaluate monopolies on a case-to-case basis and in relation to the economic tasks which monopolies are expected to fulfill.

Works Cited

Kay, J. “How A Television Monopoly Ended in Mediocrity”, The Financial Times. The Financial Times, 24 June 2009. Web. 27 May 2010.