Triple Play Time

Abstract: Digital convergence thrusts telephony, television and the internet into the socalled 'triple play' offerings, creating new forms of rivalry between cable operators and telephone companies. Markets participants feel compelled to enter new industries to survive, even though their core competencies are limited to their primary market. The outcome of triple play competition is likely to depend on the speed of the development of new technologies and the adaptation of the regulatory environment. In the short run, telephone companies will enjoy an advantage attributable to switching costs. However, this advantage will erode as younger subscribers switch to telephony on the internet.triple play; bundling; digital convergence; broadband access; television and telephone

The Effects of Product Bundling in Duopoly

This paper studies the incentives for multiproduct duopolists to sell their products as a bundle. It is shown that contrary to the monopoly case bundling may reduce profits and increase consumer rent. This is the case if consumers' reservation values are negatively correlated. The reason is that bundling reduces consumer heterogeneity and makes price competition more aggressive. This effect can dominate the sorting effect that is well known for the monopoly case. Firms are in a prisoner's dilemma situation because they would be better off without bundling. Despite the lower prices a welfare loss occurs because some consumers do not buy their prefered product which results in distributive inefficiency. If firms can influence the correlation by choosing their location in the product range they try to avoid negative correlation and choose minimal differentiation in one good

Does public service broadcasting serve the public? The future of television in the changing media landscape

The media landscape is subject to substantial technological change. In this Discussion Paper, we analyse how technological trends affect the economic rationale for PSB. After identifying the aims and nature of PSB, we derive eight possible market failures from the specific economic characteristics of information. The changing relevance of these market failures is subsequently discussed in the light of the technological changes. Based on this analysis, we argue that public service broadcasting (PSB) for the digital age should be light in the sense that it has a much smaller mandate. The main reason for this conclusion is that, due to technological developments, many market failures in the broadcasting industry are no longer relevant. The broadcasting market thus functions more and more like a normal market. This implies that the allocation tends to the efficient outcome, as long as consumer valuation is properly accounted for. This is not the case when there are externalities and possibly not when it comes to valuing quality. In the presence of these market failures, an efficient allocation is not warranted in the broadcasting industry. It is these remaining market failures that give a future PSB a right to exist.

\ud Strategic Social Marketing for Expanding the Commercial Market of Insecticide Treated Nets in Tanzania\ud

\ud The Department for International Development (DfID) has been supporting the introduction of ITNs in Tanzania since January 1998. The social marketing of ITNs for malaria prevention in Tanzania was introduced at a national scale in 2000 through the project Social Marketing of Insecticide Treated Nets (SMITN), funded by DfID and the Royal Netherlands Embassy (RNE) and implemented by Population Services International (PSI). This report reflects the SMARTNET project performance since July 2002. The SMARTNET project started in 2002 then was extended in 2004 and continued up to June 30th, 2007. The SMARTNET project was aimed at reduction of infant and under-5 mortality rates. The purpose of the project was to attain the Abuja target of regular usage of insecticide-treated nets (ITN) by 60% of the Tanzanians at high risk of malaria (children under-5 and pregnant women). The project aimed to increase the commercial availability of nets, at affordable prices; establish a nation-wide culture of ITN use; raise the percentage of net treated effectively with insecticide; and establish and maintain a monitoring and evaluation system. Population Services International Tanzania was contracted by DFID and RNE. The project is supervised by the NatNets Steering Committee, under responsibility of the National Malaria Control Programme (NMCP), part of the Directorate of Preventive Services of the Ministry of Health and Social Welfare (MOHSW). The commercial sector distributes and sells nets through a retail network, which reaches most of the wards in Tanzania. Over the years the sale of nets has increased steadily and will probably reach 3.5 million nets by the end of this year. The TRaC survey (PSI’s monitoring tool) conducted in April 2007 reports that 63% (54%) of pregnant women and 69% (55%) of U5s slept under a net (ITN) the previous night. Through the SMARTNET project insecticide re-treatment kits (NGAO) are promoted and the project has been making the net treatment kits free of charge available to all Tanzanian net manufacturers (TNM), for bundling with new nets. Purchasers of nets treat their new nets at home. While the regular Ngao protects for six months, PSI has introduced a longer lasting net treatment product, called Ngoa ya Muda Mrefu, which sustains under laboratory conditions at least 15 washes. The retreatment kits are sold through a dense network of retailers throughout the country. By the end of 2004 the Tanzania National Voucher Scheme (TNVS) was introduced, which issues vouchers to women during their first antenatal visit to a health clinic. This scheme is funded through subsidies from the Global Fund to Fight AIDS, TB and Malaria (GFATM). With the voucher women can purchase nets at a strongly reduced price (an average of US $ 1.00) from an accredited retailer of nets. Through this voucher system over 2 million nets have been purchased so far. About 80% of distributed vouchers are redeemed. The TNVS is the necessary complementary activity to reach large groups of the population at risk and to bring the nets within reach of the majority of the poor in the country.\u

The Elusive Antitrust Standard on Bundling in Europe and in the United States at the Aftermath of the Microsoft Cases

We analyze and contrast the US and EU antitrust standards on mixed bundling and tying. We apply our analysis to the US and EU cases against Microsoft on the issue of tying new products (Internet Explorer in the US, and Windows Media Player in the EU) with Windows as well as to cases brought in Europe and in the United States on bundling discounts. We conclude that there are differences between the EC and US antitrust law on the choice of the relevant analogy for bundled rebates (predatory price standard or foreclosure standard) and the implementation of the distinct product and coercion test for tying practices. The second important difference between the two jurisdictions concerns the interpretation of the requirement of anticompetitive foreclosure. It seems to us that in Europe, consumer detriment is found easily and it is not always a requirement for the application of Article 82, or at least that the standard of proof of a consumer detriment for tying cases is lower than in the US.

Challenging content exclusivity in network industries: the case of digital broadcasting

Interacting with network externalities and switching costs, exclusive dealings for premium contents in digital broadcasting markets allow incumbents to deny rivals critical mass and profitable market entry. A downstream company that acquires the exclusive rights to high-quality programming in the upstream market may obtain a competitive advantage over its rivals which suffer from negative externalities. Instead of fostering competition and innovation, exclusive licensing serves as an effective entry-deterrent strategy in order to preserve market power and to leverage monopolies. Although exclusivity for premium content has long been considered the only way for guaranteeing the remuneration of the vast investments in content production and platform infrastructure, this paper challenges the profitability of this exclusivity strategy in network industries. The paper questions the traditional economic assumptions underlying exclusivity of content and argues that the increasing emergence of multi-sided platforms in the broadcasting industry creates incentives for right holders to multi-home rather than single-home their contents. --Business model,digital broadcasting,exclusivity,bundling,shared access,innovation

Market bundling strategies in the horizontal portal industry

The arrival of the Internet offers opportunities for both incremental efficiency gains and complete industry redefinition, presenting new value propositions and hence leading to the emergence of new businesses and industries. One particular case is that of the horizontal portal industry, such portals being consistently the most visited sites on the Web. Nevertheless, despite ongoing market concentration, overall profitability remains low. In this paper we contend that, although the industry has great potential for value creation, value appropriation in such information-based businesses remains problematic. The only way to achieve it is through cross-market bundling; that is, portals selling their products packaged with Internet access and proprietary content through system competition. We support our claims with theoretical argument and empirical evidence, analyzing the information distribution value chain in its entirety.Portals; information goods; Internet advertising; Internet service providers; content provider;