The Price of Silence: Media Competition, Capture, and Electoral Accountability

Is competition in the mass media market an effective deterrent against media capture? Does it prevent political groups from influencing reporting? This paper shows that in some cases it does not. Building on the literature on media capture, the model highlights that, under fairly generic assumptions, high competition in the media market can drive the cost of media capture to zero, making capture easier. Moreover, it highlights conditions on the parameters where the effect of competition on capture is non-monotonic, i.e. capture occurs when competition is either too little or too much. The implications of the model are confirmed by the empirical event study analysis of the implementation of a competition-enhancing policy, digitization of terrestrial television in Europe. We find it has a negative effect on freedom of the media from political influence.