Monopoly Power in the Electronic Information Industry: Why, and So What?

This law and economics article diagnoses why monopoly power infects so many markets in the electronic media, communications, and information technology industries (collectively the Industry ),and recommends changes to prevailing intellectual property and antitrust doctrines to remedy this problem. The analysis focuses on a single norm -- the maximization of economic value, as defined by standard welfare economic theory. Identifying three distinct functions that operate throughout this otherwise diverse Industry -- authoring, publishing, and distribution -- the article notes that two economic peculiarities characterize most Industry markets: the technical feasibility of non-rivalrous use of digitized information products, and the frequent creative destruction of Industry markets by new technologies and business methods. Using these concepts, the article argues that, while concern surrounding media megamergers is overwrought, certain public policies do significantly constrain economic value creation in the Industry. The article proposes reforming several major legal doctrines and public policies to loosen these constraints, e.g.: (a) reduce the over recognition of copyrights and patents, (b) cease the over enclosure: of the radio spectrum, (c) challenge more frequently nationalizing mergers among local/regional distribution network monopolies, (d) aggressively promote open standards for interconnecting networks and software platforms, and (e) simplify antitrust rules against the cross-market leveraging of monopoly power, including a ban on dominant distribution companies engaging in preferential self-dealing in related markets. The article concedes that such reforms, though also satisfying many non-economic norms, would meet stout political resistance from established Industry firms

Connecting Customer Value to Social Media Strategies: Focus on India

Hospitality brand managers are well aware that creating customer value is a key aspect of brand management. For hotel operators in India, the internet and social media are newly emerging issues that are inextricably related to creating customer value. All hoteliers seek to solve the intricate puzzle of customer loyalty as it relates to customer value and brand management. In the first Cornell Industry Roundtable held in India, the discussion focused on how to create and measure customer value in the electronic era. Given fast-evolving technological advances (e.g., mobile apps and other innovations, social media, opaque pricing) and rapid hospitality industry growth in India and other emerging markets, the topic of customer value is particularly timely. Thus, this roundtable discussion began with issues surrounding customer value, and then continued into the realm of social media, as that topic relates to brand management and value creation

The rise of customer-oriented banking: electronic markets are paving the way

The banking industry has been a pioneer in adopting electronic markets with exchanges, clearinghouses, and multilateral trading facilities having become the backbone of today’s globally integrated financial transactions. While most banks use the services of these electronic markets to handle interbank processes, they still strive for bilateral relations in the field of customer-facing processes. This position paper argues that the financial crises, the changing behavior of customers, upcoming innovations based on information technology (IT) and financial services offered by non-banks are strong drivers towards more customer-orientation in the financial industry. A large variety of banking IT innovations has emerged and illustrates that traditional banks are expected to have less power to impede competition at the customer interface and in consequence need to re-position themselves. Building on these developments on the one hand and existing electronic market infrastructures in the banking industry on the other, the concept of a customer-oriented financial market infrastructure is proposed as a possible future solution. The impact is illustrated using a competitive analysis of the banking industry and analogies to the media industry where new entrants from the computing industry have caused disruptive changes. Besides describing the threat to existing banks, the position paper also discusses the perspectives for banks

Music in electronic markets: an empirical study

Music plays an important, and sometimes overlooked part in the transformation of communication and distribution channels. With a global market volume exceeding US$40 billion, music is not only one of the primary entertainment goods in its own right. Since music is easily personalized and transmitted, it also permeates many other services across cultural borders, anticipating social and economic trends. This article presents one of the first detailed empirical studies on the impact of internet technologies on a specific industry. Drawing on more than 100 interviews conducted between 1996 and 2000 with multinational and independent music companies in 10 markets, strategies of the major players, current business models, future scenarios and regulatory responses to the online distribution of music files are identified and evaluated. The data suggest that changes in the music industry will indeed be far-reaching, but disintermediation is not the likely outcome

The Application of EC Competition Policy to the Media Industry

This article examines whether EC competition policy and merger control provisions can prevent excessive market power and safeguard open access and consumer choice in the European media and communications industry. The study looks at the structure of the media industry and points to the amalgamation of corporate power. It assesses whether EC competition law and merger provisions can effectively address the dangers of ownership concentration and safeguard diversity of sources. A number of merger cases either blocked or allowed by the EC are reviewed in order to establish the level of competition. The article suggests that a more rigorous competition policy is required to guarantee competition and prevent domination in merger activity

The rise of a new cultural products industry cluster in Germany : the case of the Leipzig media industry

Over the past decade, a variety of studies have shown that other sectors in addition to high technology industries can provide a basis for regional growth and income and employment opportunities. In addition, design-intensive, craft-based, creative industries which operate in frequently changing, fashion-oriented markets have established regional concentrations. Such industries focus on the production of products and services with a particular cultural and social content and frequently integrate new information technologies into their operations and outputs. Among these industries, the media and, more recently, multimedia industries have received particular atte ntion (Brail/ Gertler 1999; Egan/ Saxenian 1999). Especially, the film (motion picture) and TV industries have been the focus of a number of studies (e.g. Storper/ Christopherson 1987; Scott 1996). For the purpose of this paper, cultural products industries are defined as those industries which are involved in the commodification of culture, especially those operations that depend for their success on the commercialization of objects and services that transmit social and cultural messages (Scott 1996, p. 306). Empirical studies on the size, structure and organizational attributes of the firms in media-related industry clusters have revealed a number of common characteristics (Scott 1996; Brail/ Gertler 1999; Egan/ Saxenian 1999). Most firms in these industries are fairly young, often existing for only a few years. They also tend to be small in terms of employment. Often, regional clusters of specialized industries are the product of a local growth process which has been driven by innovative local start-ups. In their early stages, many firms have been established by teams of persons rather than by individual entrepreneurs and have heavily relied on owner capital. Another important feature which distinguishes these industries from others is that they concentrate in inner-city instead of suburban locations (Storper/ Christopherson 1987; Eberts/ Norcliffe 1998; Brail/ Gertler 1999). In this study, I provide evidence that the Leipzig media industry shows similar tendencies and characteristics as those displayed by the multimedia and cultural products industry clusters in Los Angeles, San Francisco and Toronto, albeit at a much smaller scale. Cultural products industries are characterized by a strong tendency towards the formation of regional clusters despite the fact that in some sectors, such as the multimedia industry, technological opportunities (i.e. internet technologies) have seemingly reduced the necessity of proximity in operations between interlinked firms. In fact, it seems that regional concentration tendencies are even more dominant in cultural products industries than in many industries of the old economy . Cultural products industries have formed particular regional clusters of suppliers, producers and customers which are interlinked within the same commodity chains (Scott 1996; Les- 2 lie/ Reimer 1999). These clusters are characterized by a deep social division of labor between vertically-linked firms and patterns of interaction and cooperation in production and innovation. Within close networks of social relations and reflexive collective action, they have developed a strong tendency towards product- and process-related specialization (Storper 1997; Maskell/ Malmberg 1999; Porter 2000). In the context of the rise of a new media industry cluster in Leipzig, Germany, I discuss those approaches in the next section of this paper which provide an understanding of complex industrial clustering processes. Therein socio-institutional settings, inter-firm communication and interactive learning play a decisive role in generating regional innovation and growth. However, I will also emphasize that interfirm networks can have a negative impact on competitiveness if social relations and linkages are too close, too exclusive and too rigid. Leipzig's historical role as a location of media-related businesses will be presented in section 3. As part of this, I will argue the need to view the present cluster of media firms as an independent phenomenon which is not a mere continuation of tradition. In section 4 the start-up and location processes are analyzed which have contributed to the rise of a new media industry cluster in Leipzig during the 1990's. Related to this, section 5 will discuss the role and variety of institutions which have developed in Leipzig and how they support specialization processes. This will be interpreted as a process of reembedding into a local context. In section 6, I will discuss how media firms have become over-embedded due to their strong orientation towards regional markets. This will be followed by some brief conclusions regarding the growth potential of the Leipzig media industry

The Industry and the Unions: An Overview

[Excerpt] This overview chapter provides a framework for the chapters that follow by broadly describing the arts, entertainment, and electronic media (AEEM) industry and the problems confronting it. The overview is presented in four sections focused on: first, the economic structure of the industry; second, unions and bargaining structure; third, the impact of technological changes; and fourth, historical responses on the part of unions and the labor relations system to technological change