The Triple-Play Bundle Strategy of Cable and Telephone Companies in the Current U.S. Telecommunications Market

Abstract

The development of Internet Protocol technology and the Federal Communications Commission's competition-promoting policy have brought about triple-play offering services that combine video, voice, and data services in a single package at a discount rate for telecommunication consumers. As cable and telephone industries offer similar bundles, the price competition promise to increase, which may lead to thinner profit margins. That companies bundle services despite the fact that selling 3 services independently at regular prices would bring greater benefits to the companies is referred to as the “prisoner's dilemma.”

In this situation, a company commits a “one minimum and one maximum” strategy to prevent its existing consumers from switching over to its competitors and to attract new consumers. Using data regarding the triple-play bundle from 69 U.S. cities, this study reveals that both cable and telephone industries minimize price differentiation for the triple-play offering. Furthermore, this study demonstrates that both industries maximally differentiate in the video service category compared to the other 2 services in the triple-play bundle: voice and data.     

Vertical Integration and Market Foreclosure in the Korean Cable Television Industry: An Empirical Study

This study investigated vertical foreclosure effects in the Korean cable television market. While it focuses mainly on vertical foreclosure, the study also examined reciprocal carriage between large vertically integrated cable operators. From the analysis of cross-sectional data regarding cable operators' carriage information in Korea, two conclusions were derived. First, vertically integrated cable operators tend to carry their affiliated channels and were less likely to carry their rivals' channels. Second, the data suggest that large vertically integrated cable operators were engaged in reciprocal carriage.     

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.     

Diffusion of the New Video Delivery Technology: Is There Redlining in the Internet Protocol TV Service Market?

This study examines the current status of the entry behavior of Internet Protocol TV (IPTV) into the video programming service market, with a particular focus on income redlining and local competition. Analyzing previously unavailable data on telecommunication companies' introduction of IPTV services into Indiana, this study found that although IPTV's entry into the state increased the local competition between cable and IPTV, this local competition was mostly confined to higher income areas due to the income redlining tendency associated with IPTV's entry. These empirical findings raise the issue of the recent deregulation policy reforming cable franchising rules, whose goal was to promote local competition but which might insufficiently reflect the public interest, especially for low-income households.     

Can You Repeat That? Patterns of Media Ownership and the “Repurposing” Trend

The article examines shifting patterns of ownership for cable programming services from 1994 to 2003. In these years, vertical integration in the cable industry declined, as cable's multi-system operators divested equity in programming services. Meanwhile, broadcast network-owning media conglomerates invested heavily in cable, tripling their holdings among the top 20 most fully distributed cable channels, as well as launching and acquiring dozens of additional, less widely distributed channels. In light of the Federal Communications Commissions' recent attempts to revise rules regarding television ownership, the author argues that while vertical integration has declined, the market power of the broadcast networks has grown by means of a new kind of horizontal integration that reaches across broadcast and cable channels. This shift is reshaping cable as a market which, despite growing product differentiation, is trending toward less competitive conditions that are akin to the broadcast oligopoly. This article shows that these broadcast-cable alliances contributed to the development of the new synergistic practice of repurposing.     

Index to Volume 55, 2011

This article reports a national study of Internet users' usage of cable television Web site features to illustrate the dynamics of cross-media use in electronic media and explore the role of cable television network Web sites in network branding and viewership. Our findings indicate that younger Internet users are much more likely to use television Web sites than older Internet users. Despite the low use of the enhanced features of television Web sites, the increase in the number of Web site feature usage positively predicts viewer loyalty, subscriber loyalty, and to a lesser extent, new subscriber attraction for cable networks.     

The business of international broadcasting cultural bridges and barriers

The advent of international satellite television broadcasting, including the satellite‐to‐cable services which are now proliferating in several countries of the world, represents a qualitative leap in the nature of broadcasting. Satellite distribution is a literally ‘international’ medium in which signals can not only spill across neighbouring borders, but reach audiences spread over entire world regions and even link diasporic communities on different continents. The concerns raised by various countries about national sovereignty and their attempts to control reception are well‐known, but dishes and cable systems have flourished, and international and regional services are leasing new transponder capacity faster than operators can get their satellites into orbit. In this new satellite business, language and culture are emerging as powerful forces in making and breaking world‐regional markets. Thus, in contrast to the large degree of regional integration in Latin America, thanks to its linguistic and cultural similarities, service providers in Asia have soon found that they have to take account of linguistic and other cultural differences in establishing their markets, which therefore have more of a national than a regional character. This article reviews these trends and outlines how the technological potential to integrate regional markets via satellite broadcasting across borders has been attenuated at least as much by cultural as political resistance. Evidence of the effectiveness of such resistance, it is argued, raises questions about the validity of the rhetoric of ‘cultural imperialism’ now being heard again in Asia.     

Market Structure and Local Signal Carriage Decisions in the Cable Television Industry: Results From Count Analysis

Using historical data collected by the U.S. General Accounting Office (GAO) in 1990 (GAO, 1990), a time when the must-carry rules were not in effect, this study empirically tested the effects of horizontal concentration, vertical integration, and other system-specific variables on cable operators' carriage decisions regarding local television stations. Results from the negative binomial regression model (a count model) indicate that horizontal concentration or firm size had a negative effect on cable system carriage of local broadcast stations, holding other factors constant. However, the study did not find any significant vertical integration effects on such carriage.     

Exploring geographic disparities in broadband access and use in rural southern Illinois: Who's being left behind?

Recent literature about broadband telecommunications reveals two major areas that are not only globally gaining prominence, but are also demanding urgent attention from a research perspective. One of the key areas is related to the need to spatially evaluate the availability and deployment of broadband services, especially among urban versus rural communities. Another area of interest falls under the need for enabling broadband policies and strategies that address existing geographic disparities. These motivating factors shaped this research and provided a basis for defining three specific objectives, namely: (1) to identify locations with or without broadband access, (2) to identify underserved rural and inner-city markets, and (3) to determine whether university and community college towns can be used in the adoption and dispersion of broadband technologies in southern Illinois. Supply-side and demand-side data were collected and inputted into a Geographic Information System (GIS). Supply-side data included cable modem, digital subscriber lines (DSL), wireless, and fiber optic lines, while demand data included reported broadband requests from individuals without access (n = 439), students (n = 45,866), and higher education workforce (n = 5419). Using the GIS and statistical techniques, insightful maps of broadband infrastructure were created to illustrate areas of supply and demand so that governments and businesses can address existing gaps in consumer needs. Specifically, different levels of broadband access and use were mapped; different under-served rural and inner-city markets were identified so as to emphasize the dramatic economic impact on the business opportunities available to small business entrepreneurs. Also, different geographies of use and accessibility of broadband connectivity in the study region were synthesized to support decision-making. The resulting maps provided supply and demand marketing intelligence based on the geographic analyses of residential and enterprise sectors. These data can be used as a model to develop specific policy recommendations for a knowledge-based economy, specifically for the southern Illinois region or other rural communities in the United States.     

Market Competition and Cultural Tensions Between Hollywood and the Korean Film Industry

The market shares of Hollywood movies in European and Asian markets are so large that policymakers around the world are concerned about the import domination not only in theaters but also in the subsequent windows. Media economists acknowledge that domestic producers have an advantage in terms of a "cultural discount," referring to the unavoidable disadvantage of imported films. However, expenditure on a film's production also determines the extent of popular appeal, thus creating an advantage for films that have a large and wealthy home market base such as Hollywood. In this article, I aim at understanding the dynamics of these 2 seemingly opposing forces in the motion picture market in Korea. I review the film market in Korea, explore the relation between performances of 2 windows, theaters and home video, over the two countries-the United States and Korea-and compare the determinants of performance of Hollywood and local films in Korean box offices. A strong hit orientation and preference for local content was empirically found.     

Churn Management and Policy: Measuring the Effectiveness of Fixed-Mobile Bundling on Mobile Subscriber Retention

This article uses a Tobit regression model to investigate the factors affecting mobile subscriber retention in South Korea. The results show that fixed and mobile bundling plays a significant role in lengthening mobile subscriber retention, while its effectiveness varies depending on which fixed services are included in the bundle. The provision of 4G wireless broadband service (i.e., WiBro) in a bundle with 2G/3G mobile service showed a positive but insignificant relationship with mobile subscriber retention. In addition, previous relationship of a subscriber with an operator has a significant effect on mobile subscriber retention: Customers who recontracted remained longer with a contractor compared to those who changed operators. Monthly mobile payment has a significant but negative effect on mobile subscriber retention. Subsidy-bound contracts and gender had no effect on retaining mobile subscribers in the long term.     

Programming Strategies of U.S.-Originated Cable Networks in Asian Markets: Descriptive Study Based on the Product Standardization and Adaptation Theory

Abstract

This multiple-case study explored television programming products offered by U.S.-originated cable networks—namely, Music Television, Cartoon Network, Entertainment and Sports Programming Network, and Discovery Channel—in such Asian markets as Japan, Singapore, and Taiwan and attempted to identify factors that shape their programming strategies. On the basis of theoretical foundations concerning product standardization and adaptation in international marketing research, this study found that various external and intrafirm factors, ranging from host country's cultural and environmental characteristics to network's business orientation, are relevant to the decision on programming products by global television networks.     

Soft-Core in TV Time: The Political Economy of a “Cultural Trend”

This essay deconstructs popular notions that “sex sells” in an increasingly sexualized U.S. popular culture by examining the specific political, social, and economic forces behind the creation and expansion of Girls Gone Wild, a home video series marketed through television infomercials. The crackdown on hard-core pornography, followed by the opening of television infomercial markets, paved the way for the series’ creator to bring together the structural organization of a new soft-core video industry with the marketing aims of a cable industry eager to sell young, male ratings.     

Breaking the structural logjam: The impact of cable on local TV market concentration

The author considers the effect of cable on market concentration in local television markets using different types of market definitions for the analysis. He concludes that cable has introduced competition and that it has lowered concentration levels in local markets, thus altering the structure of television markets put in place by FCC television allocation plans and limits of local economies.     

Assessing information security risks in the cloud: A case study of Australian local government authorities

Cloud computing enables cost-effective and scalable growth of IT services that can enhance government services. Despite the Australian Federal Government's ‘cloud-first’ strategy and policies, and the Queensland State Government's ‘digital-first’ strategy, cloud services adoption at local government level has been limited—largely due to data security concerns. We reviewed the ISO 27002 Information Security standard with extant literature and found that operational security, individual awareness and compliance matters pose more significant government challenges than the often-highlighted technical and process-oriented cloud security requirements. This study identifies and explores the critical factors associated with information security requirements of cloud services within the Australian regional local government context. We conducted 21 field interviews with IT managers, and surveyed 480 IT staff from Australia's 47 regional local governments. We propose a conceptual cloud computing security requirements model with four components – data security; risk assessment; legal & compliance requirements; and business & technical requirements – in order to promote a balanced view on cloud security for governments. Using this model, governments can work together to demand uniform security requirements for adopting cloud services.     

Household‐level demand for cable television: A probit analysis.

The authors explore demand for cable services in individual households and find that the quality of over‐the‐air reception, interest in nonprogramming entertainment services, and service quality directly affect that demand. The study also explores demographic and behavioral differences in demand for basic and pay services and outlines their implications for cable systems operators.     

新媒体视角下图书馆的信息服务

为适应新媒体技术环境的变化,图书馆信息服务需要创新服务理念,利用新媒体技术促进信息服务模式转变,构建图书馆的新媒体信息服务体系。三网融合服务的发展,将促进图书馆拓展延伸信息服务领域,实现跨网络、跨终端、跨媒体的创新式信息服务。     

Sport and the Transnationalizing Media Corporation

This article contributes to the understanding of how transnational media corporations enter, operate, and are structured in different national contexts. Specifically, it provides a detailed examination of News Corporation's use of sport as an instrument for successfully penetrating national television markets within the United States, the United Kingdom, and Australia. The discussion is divided into 3 sections, focused on (a) the cultural and economic rationales underpinning News Corporation's use of sport as a core aspect of transnational television market entry strategies, (b) examples of News Corporation's use of sport programming to enter and manage local media markets, and (c) the changes wrought in News Corporation's organizational structure and focus resulting from its transnational sporting orientation.