Impact of Moderate and Ruinous Competition on Diversity: The Dutch Television Market

This article analyzes how competition in television broadcasting influences diversity of program supply. We argue that competition in oligopolistic broadcasting markets can take different forms, depending on the strategies adopted by broadcasters. We distinguish between moderate and ruinous competition, and discuss under what conditions these types of competition will emerge. We hypothesize that moderate competition improves diversity, whereas ruinous competition produces excessive sameness. We test these hypotheses for the Dutch television market.     

“Riding Two Horses”: Radio at Television's Creation. An Interview With Dr. Frank N. Stanton

This study investigates both the internal competition for advertising revenues among radio stations and the external competition with other media. The study of the advertising revenues of the Greek radio market from 1988 to 2007 shows that there is a low concentration in the sector, allowing low barriers to entry. However, the radio market is inferior to other media regarding advertising revenues. A key reason is the constant decrease of the advertising cost, something that in the future may affect the intensity of competition and the quality of radio station content.     

Incoming Editors' Note

The authors considered a model of commercial television market with advertising with probabilistic viewer choice of channel, where private broadcasters may coexist with a public television broadcaster. The broadcasters influence the probability of getting viewer attention through the amount that they spend on programming, so that their advertising capacity depends on their own program outlays as well as on those of their competitors. A larger number of broadcasters will reduce overall capacity even when total program outlays are kept fixed, because the attention of viewers is split among a larger number of channels. The authors derive properties of equilibrium in an oligopolistic market with private broadcasters and show that the number of firms has a negative effect on overall advertising and viewer satisfaction. If there is a public channel that also sells advertisements but does not maximize profits, this will have a positive effect on advertiser and viewer satisfaction.     

Economic policy essay: Broadcasting industry response to new technologies

This essay explores how the broadcasting industry and its audiences have responded to the introduction of new broadcast technologies, including color TV, UHF TV, VCRs, AM stereo, and stereo TV, and asserts that broadcasters and audiences have complementary roles in determining what will be introduced and accepted. The authors argue that broadcasters and government—as the representative of community and audience interests—need to play roles in setting standards for new technology based on the principle of promoting efficiency.     

Exploring the link between culture and strategy in media organisations: The cases of the BBC and CNN

Abstract

This study employs participant observation methodology to examine the U.S. broadcast industry's cognitions of its external environment. Previous research has documented a tendency among industry participants to operate under outdated mental models of their environment. This tendency ‐ labeled ‘cognitive inertia’ ‐ provides the analytical framework for this study. The results provide indications that broadcasters operate under what appear to be outdated mental models of their external environment, with broadcasters appearing to pay inadequate attention to competing program sources and failing to account for the changing demographic composition of the television audience. However, these conclusions are tempered by the broadcast industry's dual‐product marketplace characteristics, wherein cognitions that would appear to reflect inadequate assessment of the content market may in fact reasonably reflect the contemporary realities of the audience market.     

Effects of Mergers and Competition on Consumer Benefits in the Multi-Channel Video Programming Industry in Korea

This article examines the welfare benefits of cable television (CATV) merger and acquisitions in the multi-channel video programming distribution (MVPD) market. In particular, it seeks to answer whether cable subscribers are better off in competitive markets than in concentrated markets. This article estimates the impact of mergers by examining Korea's regional market-share data for MVPD operators with a hierarchical-choice model. First, the estimation results show that the consumer value of the CATV platform, in terms of the category values in a nested logit model, was significantly lower in the concentrated markets than in the more competitive markets. Second, the study compares these findings with those in the literature about the U.S. market. The following question is prompted: Why is direct broadcast satellite competitive with CATV in the United States but not in Korea? This article points out that differences in regulatory policies, particularly as they relate to the treatment of vertically integrated networks, do have significant effects on the effective boundary of MVPD competition across platforms. To support this argument, this article provides details on the policies and market characteristics of the Korean MVPD industry.     

Price Discrimination and Audience Composition in Advertising-Based Broadcasting

In this article, a model is introduced that has 2 distinguishing features. First, the multidimensional nature of competition in media markets characterized by free access and advertising is acknowledged, through explicit modeling of vertical and horizontal differentiation. Second, the price of advertising depends on the expected audience composition, not simply on its magnitude, and the amount of price discrimination. It is found that market equilibria depend on a number of critical factors: the amount and type of price discrimination in advertising, the correlation between formats and audience composition, the relative profitability of the different market segments, and diseconomies of scale in program quality. For a variety of market structures, the ability to discriminate on the price of advertising encourages a higher level of quality in broadcast media.     

A framework for assessing market entry opportunities for internet‐based TV

Abstract

The advent of the Internet alleviates the access bottleneck to TV distribution channels and softens licensing requirements. This lowers entry barriers to TV markets via the Internet in various forms. This paper takes the German TV sector as an example to analyse the attractiveness of TV markets for new entrants. A sequential framework for entering TV markets is introduced. The skills set of an Internet‐based TV provider for such an entry is examined. Technical feasibility, legal aspects, and potential sources of revenue are considered.

Potential above average profits due to the market's oligopolistic structure, as well as an increased contestability thanks to lower market entry barriers seem to render the German TV market attractive for new entrants. In early 2002, Internet‐based TV still faced severe technical and legal constraints. The analysis suggests that once these constraints have been overcome, the Internet could be an attractive additional distribution channel for some types of television content. While existing revenue sources from the TV sector are expected to be transferable to a certain degree, the value of innovative revenue sources based on online sales cannot yet be determined. This value will depend on the future acceptance of interactivity by the viewer (e. g. Owen 1999).     

Standpoint: Television broadcasting leads Romania's march toward an open,democratic society

Television broadcasting started slowly in Romania and for decades languished under strict state control. However, since it helped break the shackles of dictator Nicolae Ceausescu's unique blend of Communist dogma and censorship, it has been leading Romania's march toward a more open, democratic society. At first, broadcast improvements were slow to develop as the first democratically elected regime in post‐revolutionary Romania maintained its Communist‐era monopoly overstate television. More recently Romania has seen a dramatic increase in broadcast competition and freedom. Four factors have played particularly significant roles in spurring improvements: the development of alternative networks, access to Western‐style programming and production techniques, the rise of private, independent broadcasters, and the international exchange of broadcast content.     

Extending the Television Brand: An Examination of Why Consumers Use Broadcast Network Web Sites

Framed by the technology acceptance and customer-based brand equity (CBBE) models, this study investigated how audiences intend to use broadcast television network Web sites. Drawing upon the results of a survey (N = 178), this research found that perceived ease of use and perceived enjoyment significantly influence intent to use broadcast Web sites. Findings also reveal that CBBE plays a significant role as a mediator between motivations and behavioral intention to use broadcast networks' Web sites. It is concluded that as the medium of television evolves, networks' Web sites should be conduits for sustained brand allegiance and broadcasters should make more strategic use of their Web sites.     

Extending the Broadcast: Streaming Culture and the Problems of Digital Geographies

This article examines the recent move by many television sports broadcasters of streaming their content online behind geographically restricted “geofences.” Despite the increasing use of this distribution method, we argue that Internet users are increasingly bypassing geofences that center sports consumption within a nationalized television broadcasting framework through the use of VPN (virtual private network) technologies. Importantly, the geographic fluidity of the Internet often allows users to do this legally—producing meaningful ruptures in the logic that seeks to replicate the structures of mediation central to the television broadcast model within the space of the Internet. We argue that the streaming of sports content, then, should be understood and analyzed as an enforcement of corporate media strategies and reflection of telecommunication policy, as well as a cultural practice and tactic. Large transnational media corporations, typically the holders of popular sporting rights, attempt to bend digital sports content consumption to the broadcast models that they have historically employed. Yet, amidst this emerging model of digital broadcasting lie the problems of digital geography and the cultural practice of a streaming culture within the conditions of post-convergence. This practice often rejects the restrictions and stipulations of digital broadcasting in favor of a globetrotting, station-hopping exercise of content hunting.     

Introduction to the Symposium on Canadian Radio Research

There has been a dramatic shift in the philosophy of broadcast regulation. After decades of managing the local radio market structure with policies of ownership regulation, Congress and the FCC have mandated policies of ownership deregulation. This study examines the effect of deregulation policies on the small market radio industry. Recent research has explored issues of radio market structure and performance in larger markets; however, few studies have examined the impact of policy in smaller markets. This study analyzed 52 metropolitan statistical areas with populations less than 125,000. The study used regression analysis to identify the effect of deregulation on the number and type of radio owners in the small markets. Overall, the results revealed that the Telecommunications Act of 1996 had a dramatic impact on the number of local radio owners in the small markets.     

European media markets in the 1990s

Europe in the 1990s will be a dynamic media market, demanding a wide variety of products. Mass communication will give way to market-segmented media. This market will not be dominated solely by a few giants, but will have room for players of all sizes. The electronic and print media will complement each other. The European market of the 1990s will not be unified: linguistic, psychological, and cultural barriers will maintain and perhaps even strengthen local markets. And competition for both markets and rights will grow. This suggests that the successful European media companies of the 1990s will need to be sensitive to a variety of cultures, as well as experienced, managerially competent, and in possession of a strong infrastructure in both the international and local markets.     

Competition between the cable and broadcast industries: A niche analysis

The authors show that although there is increasing competition between cable television, broadcast television, and radio, broadcast television remains a strong competitor and has not yet been displaced by cable television in the advertising market. Radio still remains competitive, but not to the degree of broadcast television. The authors suggest that cable television will not rapidly overwhelm and push broadcast industries out of the market.     

Youth Radio Listening in New Zealand: More Choice,More Listening

This study found that in the 1O years since the near total deregulation of the New Zealand radio environment, the number of available youth- oriented radio choices has increased in three of the four markets examined, while the variety of choice increased in all markets. Results also showed that 10-17 year old 7ime Spent Listening (TSL) had increased significantly, contrary to trends in overseas markets, but growth was restricted to areas where the number of outlets had increased. It was evident that at least two of the promised benefits of deregulation (increased listener choice and increased listening) were justified. However, it did appear that there was an order of impact as a function of market size, with listeners in larger markets benefiting before those living in smaller, less revenue rich areas. Such growth was dependent on the financial success of commercial operators. It was concluded that the full effects of deregulation take time, particularly with reference to less commercially desirable markets, but there were warning signs that the impact could be selective and restricted to markets that can assist operators in achieving financial growth and profitability. It was suggested that countries considering changes to broadcast policy could learn from the New Zealand experience.     

Education for broadcasting: 1929–1963

As is implicit in its name, the purpose of the Association for Professional Broadcasting Education is to work to continually improve the quality of education available for college students interested in joining the profession of broadcasting. The Journal of Broadcasting, as an agency of the APBE, has published some six dozen articles dealing with this subject in the eight years of its existence. However, the rapid growth of broadcast education, the normal turnover of teaching personnel, and the more‐than‐one‐generation span of this field of study have combined to make it difficult to see where we have been, and doubly hard to see where our present activities (as educators and broadcasters interested in broadcast education) are leading us. The following article attempts a broad survey of the first thirty‐five years of broadcast education. It is published for the benefit of the students in these curricula, the professors that teach them, the broadcasters who are called upon to test the “end product” and those in each category who recognize that one of the most important criteria for judging whether a body of activities is truly a profession is the quality of the education made available to the would‐be practitioner, and the traditions that lay behind it.     

An association of soviet‐sphere broadcasters: The international radio and television organization

Although American broadcasters are conscious of the role of the North American Regional Broadcasting Agreement, it may well be that few realize the existence of other regional broadcasting agreements and bodies, with different functions, and cast into a different mold. One such body is the International Radio and Television Organization (OIRT) which coordinates the broadcast activities of nations within or allied in varying degree to the sphere of influence of the USSR.     

Modeling Media Markets: How Important is Market Structure?

The traditional approach to studying media markets based on structure-conduct-performance relations has become more complex as the analysis of firms' strategic behavior has emphasized the heterogeneity of possible market outcomes. It is argued that although greater analysis of firm strategic behavior is required, an investigation of market structure and ownership patterns remains critical for the elucidation of the nature and extent of market power. The recent history of television markets in Germany and the United Kingdom provides an example of the significance of trends in concentration and ownership for the development of competition. In addition, a full account of firms' power may require consideration of alternative perspectives on the competitive process, but again market structure remains important.     

Factors Supporting and Hindering New Entry in Media Markets: A Study of Media Entrepreneurs

Despite ongoing concern about so-called “big media” erecting barriers to entry, thousands of new media enterprises are formed annually. It raises the question, “What factors support or hinder new entry in media markets?” A study of 30 U.S.-based media entrepreneurs was undertaken to answer the question. For these entrepreneurs, factors that support entry were abundant; and few, if any, barriers exist to entry and to sustained operations. Two sources of support stand out: the effects of technological innovation and so-called “big media,” which, far from erecting barriers, can be a major source of opportunity.