Vertical Ownership, Program Network Carriage, and Tier Positioning in Cable Television: An Empirical Study

Vertical Ownership, Program Network Carriage, and Tier Positioning in Cable Television: An... Using a 2004 cross-sectional database of digital cable systems in the U.S., we provide new evidence that the effects of vertical ownership ties between systems and programming suppliers persist in spite of extensive channel capacity expansion, as well as new competition from direct broadcast satellites. Focusing on four program network groups (basic outdoor entertainment, basic cartoon, basic movie, and premium movie), we generally find that integrated cable systems carry their affiliated networks more frequently and carry unaffiliated rival networks less frequently—a pattern identified by previous studies using data prior to DBS or the capacity expansion effects of digital cable. We also find that integrated systems that do carry rival networks often position them on digital tiers having more limited subscriber access, a pattern not investigated in previous studies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Vertical Ownership, Program Network Carriage, and Tier Positioning in Cable Television: An Empirical Study

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Publisher
Springer Journals
Copyright
Copyright © 2007 by Springer Science+Business Media, LLC
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-007-9134-z
Publisher site
See Article on Publisher Site

Abstract

Using a 2004 cross-sectional database of digital cable systems in the U.S., we provide new evidence that the effects of vertical ownership ties between systems and programming suppliers persist in spite of extensive channel capacity expansion, as well as new competition from direct broadcast satellites. Focusing on four program network groups (basic outdoor entertainment, basic cartoon, basic movie, and premium movie), we generally find that integrated cable systems carry their affiliated networks more frequently and carry unaffiliated rival networks less frequently—a pattern identified by previous studies using data prior to DBS or the capacity expansion effects of digital cable. We also find that integrated systems that do carry rival networks often position them on digital tiers having more limited subscriber access, a pattern not investigated in previous studies.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jul 17, 2007

References

  • Vertical integration, market foreclosure, and consumer welfare in the cable television industry
    Chipty, T.
  • Horizontal concentration and vertical integration in the cable television industry
    Ford, G.S.; Jackson, J.D.

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