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Chapter Two: Literature Review
This chapter reviews past literature on industry competition and strategy, with particular focus on competition and strategy in television industries. Approaches and frameworks in examining industries, competition and strategies in television industries will be identified. The advantages and disadvantages of the approaches and frameworks will also be summarized.
2.1. Literature on television industries
As media conglomerates started to take shape in the various media industries in the 20th century, the study of media industries became more prominent due to the ubiquitous and pervasive nature of media industries. Today, research and inquiry in the field stretches across disciplines, theoretical domains and political systems, allowing understanding of critical issues in economics, competition, management, media markets, organizational behavior and strategies in media firms and industries (Albarran, Chan-Olmsted & Wirth, 2006; Chan-Olmsted, 2006).
Following the rising trend of media convergence (where there is an integration of data, media and telecommunications systems) and changes in economic, regulatory and technological structures, there is an increasingly growing global phenomenon of studies examining media industries. Albarran, Chan-Olmsted & Wirth (2006) also stated that literature devoted to television management in various countries is increasing from both local and global perspectives.
Television industries in United States have also been largely examined in recent years, evident from the published works of scholars such as Picard (1989) who examined concepts and issues in media economics; Compaine & Gomery (2000) who examined competition and concentration in mass media industries; Albarran (2002) who discussed media markets, industries and concepts; Hoskins, McFadyen & Finn (2004) who explored the application of
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economics in new and traditional media; Chan-Olmsted (2006) who examined competitive strategies in media industries; Albarran, Chan-Olmsted & Wirth (2006) compiling scholarly works by media scholars into a media handbook examining media management and economics in the Americas and Europe and Picard (2010) examining economics and financing issues of media companies.
Chan-Olmsted (1998) examined the increasing trend of mergers and acquisitions between broadcasting companies and telephone services brought upon by convergence and deregulation.
Doyle (1998) commented that there was a redundancy in examining the issue of monopolistic and competitive provision of TV programming as it was clearly established that there was an extensive and growing competition in such industries due to increasing demand for TV programmes from technological progress which lowered costs in TV production, programming and even the quality of television sets. Compaine & Gomery (2000) examined US television industries in great detail, exemplifying complex media ownership patterns among media companies and dwindling ownership regulations by the Federal Communication Commission.
Compaine & Gomery (2000) stated that no research in mass communication should ignore questions of mass media ownership and economic implications of such control, as mass media in US and other parts of the world seek to maximize profits and therefore should be studied as economic institutions. To support its conclusions, Compaine & Gomery (2000) documented developments in US’s broadcast, cable and satellite television industries, where many companies are managing diverse businesses spanning across various media segments and markets. Such companies include Time Warner, News Corporation, Disney, Viacom and CBS. Specific examples cited were the Disney’s acquisition of ABC, the diversification into cable television
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system ownership by telco AT&T through the acquisitions of TCI and MediaOne, as well as the cooperative venture of MSNBC between NBC and computer software giant Microsoft.
Hoskins, McFadyen & Finn (2004) also raised and addressed several important questions that are widely examined by scholars in media management and economics paradigm. Studies were done to examine reasons for the influential market power of particular television franchises, the process of analyzing media industries, the effects of market structure on media firms, industry conduct and performance, the type of strategies used by companies to compete, as well as measuring the competitiveness of an industry and dimensions of industry performance. Chan-Olmsted (2006) also examined strategies and competition in US’s various television industries, analyzing areas of changes in the industries over the years, through the extensive use of Porter’s Five Force model, environment analysis approaches and strategic frameworks. Albarran, Chan-Olmsted and Wirth (2006) also concluded that competition in US’s television markets would continue to increase as new technologies and the phenomenon of media convergence allow industries to cross legal and technical boundaries to compete in several areas of communication.
In Asia-Pacific regions such as Taiwan, China, Hong Kong and Singapore, the number of television management and related studies are also increasing. In Taiwan, studies are being conducted on multichannel television management, competition and related subjects as evident through the works of Liu (1997), who examined the intense competition between multichannel operators of the various platforms and the challenges faced in audience ratings, advertising revenue, human resources, industry regulation and policy. In particular, the respective industry environments were analyzed using PEST analysis framework, followed by Porter’s Five Force model and SWOT analysis frameworks. Other studies included Li & Chiang (2001) who examined market competition and programming diversity in Taiwan’s television markets;
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Hartanto, Kow, Santoso & Wong (2002) who conducted a strategic analysis of Taiwan’s cable television industry; Chen (2002) examining the cable television industry’s ownership and concentration; Tsai (2003) on the digital broadband communication industry in Taiwan; Li (2004) on market competition and media performance of Taiwan’s cable television industry; Tsai &
Chang (2005) who discussed mass media under convergence and Chen (2005) who discussed the broadcasting media ecology and industry in Taiwan. In particular, Chen (2002) examined ownership and concentration in Taiwan’s cable television industry and concluded that the industry had become oligopolistic and was increasingly being controlled by a small number of local media conglomerates.
In other regions such as Hong Kong, Japan and South Korea, subscription television industries and their related issues have also been largely examined. In regards to the legislation and regulation, Leung and Wei (1998) examined the factors influencing the adoption of interactive TV in Hong Kong and their implications for advertising. Kang (2002) discussed factors that influenced adoption of digital cable television in South Korea. Kwak (2007) also examined the regulation of subscription television in East Asia, conducting a comparison across Hong Kong, Japan and South Korea and concluding that Hong Kong’s de-regulatory framework was more effective as compared to South Korea and Japan. Shin (2007) on the other hand, conducted a socio-technical analysis of the IPTV industry in South Korea, concluding that the industry development was first driven by technology and regulation but was now driven by market forces and users’ demands.
Competition and its related issues in the subscription television industries have also been examined widely. For example, Cheng (2009) examined competition and the enforcement of competition law in Hong Kong’s television industries, while Rhee and Lee (2010) examined the
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effects of mergers and competition on consumer benefits in South Korea’s television industries.
Hwang, Hong and Lee (2010) also conducted an analysis on the merger efficiency of vertical and horizontal integration in Korea’s cable television industry. An empirical study examining reciprocal carriage on vertical integration and market foreclosure in South Korea’s cable television industry was also conducted by Lee and Kim (2011), concluding that vertically integrated cable operators in the country tended to carry their affiliated channels and were unlikely to carry their rivals’ channels. The rise of the quadruple play strategy and media convergence had also been examined. For example, Kim and Sugaya (2006) conducted a comparison of IPTV legislation between South Korea and Japan, focusing on legislation concerning the convergence of broadcasting and telecommunications and the institutional differences of the respective IPTV services.
2.1.1. Literature on Singapore’s television industries
Television industries in Singapore were much less examined due to various reasons. Fu &
Wildman (2008) have already stated that the studies of media markets in Asia are rare. A search into past scholarly articles conducted on Singapore’s media industries revealed that few studies have been done on Singapore’s television industries as compared to other industries. Choi and Yeo (2001) examined the role of the government in the regulating and censoring of television content and the public’s opinion on existing regulations, concluding that there was a need for revision in the regulatory policies; Tham (2004) was one of the very few studies done on examining the relationship between market competition and programme diversity in Singapore’s terrestrial television broadcasting industry while Edge (2004) offered a detailed account of the
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development and competition in Singapore’s media industries, arguing that there was a need to
‘rationalize’ competition and not to eliminate it totally.
Ang (2007) on the other hand, provided a comprehensive understanding of Singapore’s television industries, summarizing its developments and regulatory policies while giving a generic overview of Singapore’s environments. There were also several studies done on the examination of competition in the FTA television industry, where MDA released the second FTA broadcasting license to MediaWorks (a subsidiary of Singapore Press Holdings), who competed against MediaCorp and resulted in losses for both television companies and MediaWorks’ eventual withdrawal from the industry (Edge, 2004; Lee, 2005; Ang, 2007).
There were also few studies done on the subscription television industry. Previous studies conducted on the subscription television industry included Aw & Lek (1997) examining the impact of cable television on Singapore’s broadcasting scene and Heng (2007) exploring audience fragmentation and polarization in Singapore’s cable television market. Similar to the public television industry, the subscription television industry was dominated by a single player (StarHub Cable TV) till SingTel Mio officially started its IPTV service in 2007. The latter was not yet seen as a strong competitor against StarHub Cable TV (Reynolds, 2006; Chong, 2007).
SingTel Mio TV was only predicted to become a strong competitor when it acquired exclusive broadcasting rights to the Barclays Premier League’s football matches and ESPN Star Sports in 2009 (Lim, 2009; Media, 2009a).
Competition between the two subscription television service providers were mainly discussed in newspapers and trade publications but not in scholarly articles (Media, 2006; Yin, 2006; Frater, 2007; Hicks, 2007; Low, 2007; TelecomWeb, 2007; Jenna, Arena & Lim, 2010;
Lane, 2010; Ramesh, 2010; Tanner, 2010; Wang, 2010b). For example, Wang (2010b) discussed
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possibilities of intense competition following SingTel Mio TV’s acquisitions of sports-related content and indirect competition with public broadcaster MediaCorp. Lane (2010) and Tanner (2010) briefly discussed the issue of the Cross-Carriage Measure and its impact on industry stakeholders including consumers while Jenna, Arena & Lim (2010) provided a detailed analysis of the issue.
Recent studies done were more focused on the developments of mobile TV in Singapore.
For example, Lin (2010) concluded that current media laws are inadequate in managing the fast developing mobile TV industries and recommended a light-touch customized mobile TV policy should be created. Lin and Liu (2011) examined and conducted a socio-technical comparison on the development of mobile broadcasting TV in Singapore and Taiwan, concluding that Singapore was most likely to adopt the DVB-H standard and utilize a subscription model for mobile TV.
Lin (2011a) and Lin (2011b) examined the emergence of three-screen TV in Singapore and argued that the current TV-centric model would not be adequate to regulate TV across multiple screens and platforms, further recommending a ‘pro-innovative’ three-screen TV policy with
‘light-touch’ licensing scheme and ‘loose’ content regulation so as to facilitate the development of the next generation TV.