Long-Lived Television Programs as Capital Assets

In 2007, I estimate that studios and networks released long-lived television programs worth $26.7 billion. Those long-lived television programs were first shown on TV in 2007 and will be broadcast for decades to come. Because of their long working life, the international guidelines for national accounts recommends that countries classify production of television and other entertainment, literary and artistic originals as an investment activity and then depreciate those television originals over time. However, BEA did not capitalize this category of intangible assets until the July 2013 benchmark revision. In order to change the national accounts, I collected data on television production from 1949 to 2010. I then calculated how GDP statistics change when television programs are classified as capital assets.

To preview, my empirical results are:

1. Long-lived US television programs accounted for approximately one third of total television viewership in 2007. The viewership share for long-lived television programs has been steady since 1949.
2. Nominal investment in long-lived television has been growing at 5.6% per year from 1990 to 2010, 0.9% faster than overall GDP. Accordingly, average nominal GDP growth rises slightly when long-lived television is counted as a capital asset.
3. Thanks to computer technology, real prices for television investment have been almost flat over the past two decades.