Introduction : (graphics not included) By October 1990, two new entrants suffered a combined investment of £1.25 billion and a weekly £10 million loss and are waiting desperately the Christmas season to fall in better hands. Rather than behave rationally and focus on profit maximization and a long run going concern for the entire industry, the two companies engaged in a bloody war, that let the industry suffer one of the major loss ever and led to the merger of the two companies . This case outlines one of the most ferocious competitions of the satellite TV, and announces a series of battles under other skies in the same industry. The situation described in the case is much to be close to a “War Game” that ends up with a takeover of one on the other . Today’s view on that situation could be biased due to the result of such game, but we will try to be as fair as possible with BSB management to justify their intention in that time. The task would not be easy due to the drastic changes in that industry during the 90’s. The two companies bet all their funds and based all their future wealth on two different alternatives. Nevertheless, these two alternatives were analogue based technologies that have been replaced rapidly in 1996 by the most cheap and higher quality digital satellite broadcasting with its standard known as DVB . The latter technology allows scrambling of the signals, stereo sounds and wide screen support. A lot of scrambling system has appeared during this period. The most secure one remains the Videoguard NDS system developed by an Israeli firm for BSkyB. Description of the situation : We are faced with an extremely competitive market with two players. The situation could be summarized in the hereunder points: - High cost entrance - High Operational Costs - Existence of substitutes (BBC, ITV and Channel 4 terrestrial TV and VCR for movie channels) - High antagonism between the players - Government intervention to regulate the industry (applicant –BSB- was “forced” to use high cost risky transmission standards) - Uncertainty about the technology used - The two companies markets the same product (TV channels package, including a movie channel) - Two “monopolists” based behaviors who are confronted to a ferocious competition. - Price was setup from the beginning in the initial application to IBA (could be assimilated to a regulation) - Each subscription is considered as an asset (power to retain its customers) because of the high cost of switching from one provider to another .
one could enter into a state of war with someone else, and the other is that one
Over the centuries, the media has played a significant role in the shaping of societies across the globe. This is especially true of developed nations where media access is readily available to the average citizen. The media has contributed to the creation of ideologies and ideals within a society. The media has such an effect on social life, that a simple as a news story has the power to shake a nation. Because of this, governments around the world have made it their duty to be active in the regulation and control of media access in their countries. The media however, has quickly become dominated by major mega companies who own numerous television, radio and movie companies both nationally and internationally. The aim of these companies is to generate revenue and in order to do this they create and air shows that cater to popular demand. In doing so, they sometimes compromise on the quality of their content. This is where public broadcasters come into perspective.
Large players can offer competitive prices if they buy in bulk. Smaller players can differentiate themselves by offering niche products and superior customer delight at a premium price.
During the 1990s, each company experienced specific difficulties to their market share. Both companies struggled to reestablish themselves in the global consumer electronics world. As the year 2000 came around, new CEOs at both companies came up with even more complicated initiatives and reorganizations. Outsiders wondered how each company’s internal changes would affect their endless competitive battle in the industry.
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
Competitive rivalry examines how intense the competition currently is in the marketplace, which is determined by the number of existing competitors and what each is capable of doing. (Arline, 2015).
TV Guide has been a household name since its debut decades ago, but the current television landscape is vastly different than it was in 1953. Viewers had three channel choices then; today, they have 300. Competition has boomed, too. Newspapers have beefed up their listings, more magazines offer television coverage and the Internet gives viewers a whole new avenue to plan their channel surfing. This increased competition also extends into the advertising world, where advertisers now have more magazines, as well as television alternatives, at their disposal.
In conclusion, the temptation for a firm to enter into a cartel or collusive agreement may not only be to fuel rising profits and sales. Some organisations may enter into these agreements not with the sole intention of boosting profits, this is clearly seen through the creation of OPEC which aids both consumers and producers development and stability. However seen above by the BA and Virgin Atlantic scandal this is the most common use for this agreement. The negative side of these types of agreements that are purely selfish and only help the producer are clear to see. Furthermore, the reason is clear as to why this agreement broke down, as the key component to any agreement is trusts and this is what Virgin broke, there was no foreseeable way this collusive agreement to continue.
A perfectly competitive market is based on a model of perfect competition. For a market to fall under this model it must have a number of firms, homogeneous products, and easy exit and entry levels into the market (McTaggart, 1992).
Nightingale, V & Dwyer, T 2006 ‘The audience politics of ‘enhanced’ television formats’, International Journal of Media and Cultural Politics, vol. 2, no.1, pp. 25-42
If competitors offer equally attractive products and services, then one will most likely have little power in the situation, because suppliers and buyers will...
The second market structure is a monopolistic competition. The conditions of this market are similar as for perfect competition except the product is not homogenous it is differentiated; thus having control over its price. (Nellis and Parker, 1997). There are many firms and freedom of entry into the industry, firms are price makers and are faced with a downward sloping demand curve as well as profit maximizers. Examples include; restaurant businesses, hotels and pubs, specialist retailing (builders) and consumer services (Sloman, 2013).
During the 1940’s, there were many big developments with the interest of the newly made machine, the television. In 1941, the FCC authorizes television broadcasting in order to control what is broadcasted and showed on television. Shortly, in 1942 there was 15 hours of programming each week. In 1945, 150 applications were made for television stations. Color television was th...
Not only is there a sense of globalisation in the things we watch but also in the way we watch them. For example, digital television has become such a part of everyday life for the majority of UK viewers that many don’t even know they have it. The total number of households in the UK with digital television now stands at 15,715,178. We are now able to watch the same channels as people at the other side of the world, thanks to digital television. We have so much choice that we, at times, don’t know what to do with all of it. It has the availability to hold around 999 channels ranging from BBC channels to children’s cartoon channels, from DIY shows to adult content channels; it is all available to us.