Introduction


The new economy is transforming the social, economic, and political foundation of institutional life and is affecting each sector of the economy (Zysman & Weber, 2001). Traditional media companies, too, are confronted with the fact that their products, e.g., entertainment and information, are affected by digitization and the Internet. The Internet enables low distribution costs, interactivity, and eliminates market entry barriers erected through broadcast licensing systems. While access to distribution channels constitutes a scarce resource for traditional media companies (e.g., Habann, 1999), the Internet provides an alternative when the necessary broadcasting rights are secured.

Reduced access barriers to the distribution infrastructure offer new players an opportunity to enter the market. Evans and Wurster (1997, 1999) describe this phenomenon for the case of newspapers. Vogel (1998, p. 213) states it more generally: " the Internet has evolved into a low-cost, mass communication medium that empowers anyone to instantly publish—anywhere around the world—words, moving pictures, music, computer software, and anything else that can be digitized."

We have defined Internet-based TV by examining definitions of traditional broadcasting (Head & Sterling, 1990, p. 4; Bittner, 1991, p. 14; Brown & Quaal, 1998; Dominick, Sherman, & Messere, 2000) as well as definitions specifically oriented to broadcasting via the Internet (Miles, 1998, p. 1; Owen, 1999; Goldhammer & Zerdick, 2000). Our main criterion for determining whether a Web-based activity can be described as 'broadcasting' is the existence of live transmission (mostly streaming) or any related technology-based application. Therefore, we use the term 'Internet-based TV' to describe any transmission of audio-visual broadcasting content that fulfills the following conditions: (1) directed at the general public, (2) using IP-based transmission, and (3) streaming live audio or video. We have chosen to focus on the synchronous program delivery (Tapscott, 1996) of Internet-based TV in order to achieve the highest degree of comparability with the existing mainstream of traditional broadcasting.

A potential market acceptance of Internet-based TV, as defined above, raises several questions. Will Internet-based TV serve the same or new viewer segments? What kind of Internet-based TV content can we expect, how interactive will it be, what will be the balance between news and fiction, between mass and niche programs, and who will produce them? Will the players be new market entrants or will agreements be reached among existing coalitions and interest groups?

By analyzing the market entry potential for Internet-based TV in Germany, we aim to touch upon some of the concrete implications of the answers to these questions. To do so, we first develop a sequential framework. Characteristics of TV markets in general and of the German TV market in particular are presented. Each of the three sequential steps proposed in the framework are then applied. Finally, conclusions and opportunities for future research are discussed.




Social and Economic Transformation in the Digital Era
Social and Economic Transformation in the Digital Era
ISBN: 1591402670
EAN: 2147483647
Year: 2003
Pages: 198

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