The Economics And Politics Of The New Media, Vol. 6 - 1999, No. 3
The concept of convergence has been bandied about for at least 25 years. Initially, concepts of convergence conflated technological integration of print, telecommunications and broadcasting systems with firm-level integration of publishers, telephone companies, cable TV operators, and broadcasters. Ithiel de Sola Pool’s (1983) concept of a single integrated common carrier that met all media needs exemplified the prevailing vision. This paper conducts a broad historical survey of the market structure of media and telecommunications industries from the analogue era of the 1940s to the late-1990s. Its chief premise is that convergence is driven by the declining cost of information processing power, and by the development of open standards. The chief effect of this upon market structure is not to encourage consolidation and vertical integration but rather to break up the media market into more or less specialised horizontal components (content, conveyance, packaging of services, software, and terminal equipment). Cheap, mass produced information processing radically undermines the economic and technological advantages of vertical integration across these component markets, and rewards specialisation and market share within individual horizontal markets. The idea of convergence has been coming in and out of fashion for more than two decades. The process can be cast in religious terms. A band of early prophets sets out a vision. Afterwards, a succession of messiah -- technologies appears that promise to realise the great vision. But, as we shall see, several of the messiah-technologies were crucified and failed to rise from the dead. Even so, one cannot discount the possibility that TCP/IP does indeed represent the Coming. In this article, I shall develop a long-term view of the convergence process. In the first part, I identify two of the prerequisites for digital convergence: (1) a technological revolution in processing power; and (2) a process of converging on common standards In the second part, I explore the impact of convergence on market structure and business models.
Deciphering Convergence. Impact of The Digital Revolution on the Media and Communications Industries
The world's media, telecommunications and information technology industries are undergoing a period of unprecedented and profound change. Dramatic technological advances combined with market liberalisation and globalisation have together engendered the “digital revolution.” A dramatic consequence of this is “convergence,” a ubiquitous but loosely defined term commonly understood to denote the blurring of boundaries between the media, telecoms and information technology sectors. There is broad consensus between academics and practitioners that technological advances are bringing these sectors closer together and have the potential to transform them entirely. Tools for analysing these developments include Porter’s (1985) value chain and the technologically-based “layer” models developed to ensure interconnection between networks (OSI 1977-84; Grove 1996; Bradley and Nolan 1998). This paper explores the relevance of these concepts as tools to analyse convergence by applying them to a range of affected sectors. It finds that the utility of the value chain concept resides in its ability to highlight in detail the dramatic changes that have already taken place as a result of convergence. However it does not comfortably accommodate the non-linear, dynamic, cross-sectoral processes that are emerging as convergence gathers pace. Conversely, the chief benefit of layer models is to offer a vision of the future, of the potential endpoint of convergence. However they are arguably too sweeping and technologically determinist to provide a basis for analysis of developments at sectoral or organisation level. The paper proposes a new model for analysing the impact of convergence, which draws on the strengths of the value chain and layer models.
The Broadcasting, Information Technology and Telecommunications sectors have in recent years been the subject of notable transformation, one important feature of which is their coming closer together in a number of ways - it is now commonplace to speak of a new hybrid sector, Information and Communications Technologies (ICTs). This convergence is of considerable interest to policy-makers in industry and government at the national and international level, as well as the academic community and. In particular, one of the key questions raised concerns how to regulate for such convergence. Focusing on the European Union (EU) context, this article argues that in recent years the telecommunications element of ICTs has been subject to change in the form of both liberalisation and re-regulation to the international level, which has been justified by numerous arguments, and indeed in some quarters vaunted as an appropriate model to be applied to ICTs as a whole. This article suggests that whilst the telecommunications policy model can provide some important pointers for the regulation of the ICT sector, it cannot provide a full and adequate response to what many see as one of the most important challenges facing policy-makers across the European Union. Specifically, certain specific features of broadcasting - most notably the nature of its public service remit - set it apart from telecommunications. Furthermore, the regulatory arrangements and structures developed at the EU level for telecommunications have only very recently been put in place and there is evidence that they are facing certain implementation difficulties. Overall, it is argued that in the short to medium term, only limited regulatory change of the kind witnessed in telecommunications will occur in ICTs as a whole.
On the face of it, DTV would seem to be a technology for which consumer demand is weak at best. As a production, delivery and display innovation, its deployment is more obviously driven by a technological rather than an audience imperative. The major question hanging over its future is how this greatly enhanced distribution system will be supplied with programmes. Much of the debate on DTV so far has concentrated on engineering standards, delivery platforms and the impact of competition, although there is now a recognition, at least in the trade press and broadcasters' conferences, that content, not technology, will drive its adoption. Major film/TV companies increasingly see the roll-out of DTV in the context of a “windowing” strategy, which serves to maximise profits by extending market reach over time as well as across territories. This will go some way towards answering the question of where significantly large new volumes of programming will be sourced in order to drive a “content is king” scenario. But there is the danger, for early adopters especially, that disillusionment may set in as the rhetoric of abundance, pushed hard by the TV industry for so long, is confronted by viewer realisation that “multiplexing” is really synonymous with “repeats,” thus elevating the existing problem of viewer resistance to repeats in analogue broadcasting to new heights. In Europe, there is little doubt that public service broadcasters should play a major role in content supply, beacuase of their vast archives of programming and their accumulated investment in production infrasctucture. But the strengths of both cultural affinities and barriers in existing, analogue TV markets, even where regulators demand quotas, must be carefully assessed before we can extrapolate to any new digital environment and the role of PSB in it. We must also assess the current tensions between public and private TV systems, intensely focussed on the European Commission and its relationship with national governments since the adoption of the Protocol of the Amsterdam Treaty, in particular the guerrilla war being waged against the EBU, the attempt to redefine PSB as a set of programming genres, the contention that the licence fee is a form of “state aid” and the argument that PSB will be competing unfairly with private TV interersts if allowed to develop “new services.”
Interactive TV is a medium providing the users with hundreds of video channels, on- demand delivery of programs, information services, on-line shopping, telebanking, etc. It is a seed-version of a comprehensive home communication medium. It is also a concrete, actual case of media convergence using developing information communication technology. It could also be a reference point to discuss the issue of telecommunications convergence. Interactive TV shows us how the telecommunications industry tries to expropriate information communication technologies according to their corporate visions. A large body of research measures interactive TV “a failure-success frame,” particularly in economic and technological terms. However, the failure-success of interactive TV is only half the story. Interactive TV is certainly a failed technology in terms of technology and business. But the question is more than just “wrong technology, wrong business plans, or wrong timing.” The problematic of interactive TV should go deeper than that. It should be reframed in the historical notion of cultural and political clashes between “the lateral mode” and “the vertical mode” in organising information communication technology in America. In short, the vertical mode of organising relates to a corporate- commercial move, whereas the lateral mode organising relates to an alternative-public move. The history of communication networks, whether broadcasting, telephone, cable, or even the Internet, in the US attests that it is a site of struggle between these two polarising ideals.
Uneven Liberalisation In Southern Africa Convergence, Regionalisation and Democracy In Communications Policy
Technological convergence between telecommunications, broadcasting and computing has become a central object of communications policy initiatives worldwide. This paper explores the implications of the associated shift towards prioritising industrial and competition policy imperatives over those of cultural policy in the context of processes of democratisation in Southern Africa during the 1990s. It examines the institutional mechanisms by which national regulatory regimes have been adjusted according to the dictates of market liberalisation promoted by international agencies (including the WTO, IMF, and World Bank), and mediated by regionally-based agencies (such as the Southern African Development Community). The paper explores the emerging tension between two philosophies of regulatory independence: a market liberal approach which prioritises transparency and independence as a condition of attracting inward foreign investment, and which endeavours to shield communications regulation from democratic oversight; and a radical democratic approach, which privileges the role of communications in the cultivation of freedom of expression and the extension of political participation, in which regulatory bodies are seen as necessarily independent of direct government control but remain responsive to pressures from civil society. The contested politics of regulatory convergence in Southern Africa are illustrated by reference to recent changes in regulatory policy in South Africa, and the extent to which the South African experience is being generalised through structures of regional governance is critically examined.