این متن را با ذکر تیترهای مربوطه به انگلیسی روان خلاصه کن Mergers and Acquisitions
Mergers and acquisitions have characterized the cable industry for years (Chan-Olmsted, 1996). In fact, the pervasive ownership interests of MSOs in programming networks has been one of the most prominent features of the cable industry structure (Parsons & Frieden, 1998). As of 2003, one third of the satellite-delivered national MVPD programming networks were vertically integrated with at least one cable MSO. Table
6.1 shows that most top MVPD providers have extensive ownership in- terests in cable networks. Leading firms like Comcast, DirecTV, and Time Warner are vertically integrated with a substantial number of popular sports, news, and entertainment cable networks. Table 6.2 further dem- onstrates the importance of such ownership interests for MVPD service providers to stay competitive with the broadcasters because 9 of the 15 most highly rated MVPD programming networks are owned by con- glomerates with top broadcast properties such as Viacom (CBS), NBC Universal (NBC), and Disney (ABC).
To assess the M&A strategies in the MVPD sector, we now examine the top MVPD service providers’ activities involving the acquisitions of pro- gramming properties and the horizontal consolidations of MVPD services.

Vertical Acquisitions for Programming Access. As indicated earlier, many leading MVPD service providers are vertically affiliated with pro- gramming producers and distributors by ownership. Comcast, the number one MVPD firm, which reaches more than 22% of the multi- channel media subscribers, however, is not the most active acquirer of MVPD programming properties as it has developed its programming mostly through joint ventures (e.g., with Sony for MGM and with Dis- ney for E! Entertainment) and internal expansions (e.g., QVC, Comcast Sportsnet, and G4). Only recently has it started acquiring programming units to enhance its current programming holdings. For instance, Comcast purchased Home Team Sports and combined it with its SportsNet in 2001 to create a powerful regional sports MVPD network. It also acquired some specialty sports networks such as the Golf Channel and the Outdoor Life Network. Most recently, in 2004, Comcast merged its G4, a network dedicated to entertainment, news, and information about video games and the interactive entertainment industry, with TechTV, a network that showcases the development, business, and life- style of the technology world (“Comcast Acquires Tech TV,” 2004). Be- sides focusing on horizontal M&A (discussed in the next section), the largest MVPD service provider seems to aim at establishing access to re- gional sports, specialty sports, and technology-oriented programming.
Time Warner, on the other hand, has amassed its programming prop- erties mostly through its acquisition of Turner Broadcasting, which gave Time Warner a vast array of cable networks, production units, and extensive film libraries (Dizard, 1997). It is evident that the program- ming assets of Time Warner are most established in the areas of news and movies, continuing its highly valued news and film studio brands (e.g., Time Magazine and Warner Bros. Studio) outside of the MVPD in- dustry. As for the other two major MVPD firms, whereas DirecTV has just been fitted with the tremendous content assets of Fox’s program- ming properties through its merger with News Corp., Cox has devel- oped access to programming mostly through its investment in Liberty Media’s Discovery channels.
It is our assertion that the acquisition of DirecTV by News Corp. is one of the most significant M&A activities in this sector because it posi- tions a major broadcaster to be also a strong contestant on the MVPD platform. In fact, broadcasters have been increasingly involved in this market through mergers and acquisition, but this has mostly occurred in the programming segment of the market. For example, Westinghouse spent some $1.55 billion in stock to purchase The Nashville Network and Country Music Television from Gaylord Entertainment Co. (Burgi, 1997). Viacom acquired BET, the largest cable network targeted at Afri- can Americans, for $2.9 billion (Hay & Saxe, 2000). Disney also ac- quired the Fox Family Channel for $5.3 billion and renamed it ABC Family whereas NBC added Bravo, the arts and entertainment network, to its cable holdings for $1.25 billion (Chunovic & Greppi, 2002). These

acquisitions have extended the broadcast networks’ reach into the MVPD programming arena; however, only News Corp., with its DirecTV unit, has an integrated access to major popular programming networks and media outlets in both the broadcasting and MVPD indus- tries. The strategic significance of a strong presence in both the MVPD and broadcasting sectors can be further illustrated by Comcast’s failed attempt to merge with Disney in 2004. Though Comcast subsequently withdrew its offer, citing dilution concerns and Disney’s lack of interest, the proposed consolidation underscores the corporate strategy of dual presence in relevant markets and multilateral competition.

Horizontal Acquisitions for Market Expansions. Since the passage of the 1996 Telecommunications Act, there has been a tremendous amount of M&A activity involving horizontal expansions of MVPD ser- vice providers. It began with US West’s acquisition of Continental Cablevision; then the United States’ third-largest cable firm (“US West Acquisition,” 1996), AT&T, also added Tele-Communications Inc. and later MediaOne to its networks (Higgins, 1999b). The wave of telco–cable mergers seemed to be a response to the potential of convergence and to the exploration of new services such as broadband Internet access and phone services over cable-system lines (Marcial, 1998). However, various divestitures of the cable properties following these high-profile ca- ble–telco combinations demonstrate the difficulty of integrating a net- work-driven telephone business with a content-driven MVPD industry. Many other MSOs such as Adelphia Communications Corp. also ag- gressively began expanding their cable properties with purchases of ca- ble systems from Harron Communications Corp., Century Communications Corp., and FrontierVision Partners LP. Another major MSO, Cox Communications Inc., grew considerably in size with its ac- quisition of Gannett Corp.’s Multimedia Cable unit (Higgins, 1999a, 1999c), whereas Comcast became the number one MSO with its pur- chase of AT&T’s cable assets for about $45.7 billion in stock, plus the as- sumption of nearly $25 billion in debt and liabilities, giving it nearly twice as many subscribers as the industry’s next-biggest MSO, Time Warner (Dreazen, 2002; Higgins, 2001). Many of these mergers and ac- quisitions are about executing a regional strategy of “clustering,” which creates economies of scale and scope, and thus enhances an MSO’s abil- ity to transform its cable systems into “advanced broadband platforms” (FCC, 2004). The FCC has reported that at the end of 2002, there were 109 clusters with approximately 51 million subscribers compared to 97 clusters with 20.1 million subscribers 8 years ago. In a sense, through mergers and acquisitions, the MSOs are attempting to develop a two-way infrastructure capable of providing advanced services such as broadband Internet and interactive television more efficiently, to create attractive regional programming, and to enhance their competitiveness
in the regional advertising market.

Our examination of the formation of strategic networks and system consolidation between MVPD service providers highlighted the impor- tance of certain corporate strategies at the exhibition stage of this mar- ket. We now review the competitive dynamics between MVPD programmers at the distribution stage of the MVPD market.

MULTICHANNEL STRATEGIC GROUP COMPETITION

Past economic discussions of the broadcast television industry have as- sumed that all programming distributors in the industry use the same funding mechanism and deliver products to a fairly homogeneous group of buyers. Such a presumption does not apply to MVPD pro- grammers. For example, whereas CNN charges MVPD service providers relatively high license fees to carry its signals, many new start-up mul- tichannel video programmers offer the providers incentives to induce carriage. Whereas USA Network carries commercials, the Independent Film Channel does not offer any local or national avails. Furthermore, most MVPD programmers have invested in branding and differentiat- ing their content products, which are sold to service providers using various distribution platforms. The traditional emphasis on “industry” as a unit of analysis seems to be less appropriate for analysis of these heterogeneous programmers. In other words, MVPD programming networks operate under a more complex business system than their broadcast counterparts and are capable of more diverse strategic com- petition. The observation that strategic diversity within an industry has a significant bearing on market behavior is central to the theory of stra- tegic groups and grounds our discussion here.
Porter defined a strategic group as a cluster of firms that follow simi- lar strategies in terms of the key decision variables (Cool, 1985; Porter, 1985). Firms within a strategic group resemble one another closely, rec- ognize their mutual dependence, and thus coordinate their behavior ef- fectively. Furthermore, when one considers intergroup market dynamics, the existence of different strategic groups affects the overall level of rivalry in the industry. When firms are associated with different strategic groups, they have different preferences about pricing, research and development (R&D), advertising, optimal output, and other market conduct. As a consequence, operational differences complicate the pro- cess of cooperation (either explicitly or implicitly) between groups (McGee, 1985). Hence, it is more likely for groups with similar strategic approaches to cooperate than it is for groups that use diverse strategies. Moreover, cooperation is easier and more likely to happen within groups than between groups. Also, environmental changes do not have equal impact on different strategic groups due to their different strate- gic postures, assets, and skills. As for the performance differences among strategic group members, many strategic group scholars have argued that there are group-specific entry barriers (i.e., mobility barri-

ers) that provide protection to group members (Olusoga, Mokwa, & No- ble, 1995). Such structural forces impede firms from freely changing their competitive positions and explain intraindustry profit differentials in a cross section of industries (Caves & Ghemawat, 1992).
Incorporating the strategic groups concept, Chan-Olmsted (1997) proposed that the MVPD programmers would, by their heterogeneous nature, exhibit monopolistically competitive market behavior at the in- dustry level. In other words, these firms attempt to build differential ad- vantages (e.g., programming differentiation) and “selectively” interact with certain competitors’ strategic actions. She also suggested that the industry-level analysis alone would not accurately reveal the competi- tive dynamics between these MVPD firms because they also compete in a group setting within the industry with oligopolistic market behavior (e.g., recognition of mutual dependency; Chan-Olmsted, 1997). Adopt- ing this analytical framework, Chan-Olmsted and Li (2002) empirically examined the strategic patterns of the MVPD programming networks and the relationship between group membership and performance us- ing the strategic dimensions (i.e., grouping variables) of size, vertical in- tegration, operating efficiency, differentiation, and pricing.
It was found that the MVPD programmers, in pursuit of monopolis- tic space (i.e., areas of natural advantage), are highly differentiated not only in their programming approaches but also in many of the strate- gic dimensions tested. By occupying different strategic positions, most of the MVPD strategic groups were able to carve out more definite and clear boundaries to avoid territory encroachment (i.e., direct competi- tion). There were groups of programmers that focus on providing pro- gramming guides and information, offer commercial-free movies, are vertically integrated with differentiated programming, are vertically integrated with general-appeal programming, are stand-alone net- works with niche programming, and are differentiated cable networks owned by broadcasters. The group composition reveals some interest- ing strategic patterns. While the presence of broadcasters may be felt through their niche cable properties, some cable-based MVPDs have tried to compete with the broadcasters with their own mass-appeal networks.
Chan-Olmsted and Li (2002) also concluded that delivering branded content that is highly valued (as suggested by per-subscriber license fees) is the key to better financial performance for the programmer with respect to revenues, both overall and in rate of return. More ad avails and reliance on ad revenue do not necessarily yield better margin or rev- enue numbers, nor does a heavy reliance on license fee revenues. Hori- zontal relationships with other programmers and increased operating efficiency seem to somewhat contribute to the performance measures. Nevertheless, vertical integration, although enhancing carriages by the service providers and/or marketing efficiency, is not essential for supe- rior performance for these firms. Finally, smaller programmers may still outperform bigger programmers in rate of return when they rely

mainly on license fee revenues and invest in programming to improve the value of their products.

VALUE CHAIN OF AN EVOLVING MVPD MARKET

Whereas the notion of strategic groups presented thus far illustrates the diversity of strategic postures for MVPD programmers, it also un- derscores the significance of the changing environment upon the com- petitive dynamics of this market. Because of the complexity of strategic postures among the MVPD firms, an environmental shift such as tech- nological advances in one area might greatly enhance a firm’s market opportunity while limiting another’s expansion plan. Also because MVPD firms are generally more differentiated and branded, changes in the environment that brought forth the opportunity of new-product development would mean a welcome chance to harvest brand equity through brand extension strategies for certain firms. The addition of product variety from the introduction of new MVPD services would again contribute to this industry’s heterogeneity and enrich its differen- tiation possibilities.
The MVPD market is truly in a revolutionary stage with many new media services developing to enhance and add to its current offerings. The list includes digital video, VOD, subscription video-on-demand (SVOD), PVRs, high-definition television (HDTV), interactive/enhanced television (ITV/ETV), Internet protocol (IP) telephone over cable, and high-speed Internet access. It is our assertion that the growth of these new products inevitably contributes to an integration of the Internet, computing, cable television, and telephone industries and thus the emergence of a multimedia market with a value chain that is multilat- eral and interwoven with previously segmented sectors. Some scholars have even suggested that it is increasingly more appropriate to examine three vertical industries—media, telecommunication, and information technology—not by individual markets but by five horizontal value-adding segments of content, packaging, processing, transmis- sion, and devices (Bane, Bradley, & Collis, 1997).
As one of the most technologically equipped media markets, the MVPD industry has ventured into many new media and broad- band-based services such as digital video, high-speed Internet access, and cable telephony, which certainly point to the emergence of a differ- ent value chain with changing functions, relationships, and players. The next section applies the concept of value chain to examine the new, evolving MVPD market.
The notion of value chain is closely related to the discussion of business models as the former scrutinizes the value that is added to a product or service in each stage of its acquisition, transformation, management, marketing, sale, and distribution (Picard, 2000). Value chain analysis al- lows a firm to understand the cost–value relationship for every stage of

their operation and thus facilitate the implementation of appropriate strategies. Hoskisson, Hitt, and Ireland (2004) and Porter (1985) detailed that a firm’s value chain includes primary activities (i.e., activities that create, sell, distribute, and service the product) such as inbound logistics, operations, outbound logistics, marketing and sales, and service and sup- port activities (i.e., activities that provide the support needed to imple- ment the primary activities) such as firm infrastructure, human resource management, technological development, and procurement. As a value chain shows how value is added from the raw-material stage to the final output, the key is to identify where the value typically resides and the value-creating opportunities for a particular product.
Figure 6.1 depicts a generic value chain for MVPD programming net- works (i.e., multichannel media programmer or packager) using the Porter value chain framework. For this group of firms, the activities as- sociated with receiving, storing, and disseminating inputs to the prod- uct (i.e., inbound logistics) and collecting, storing, and distributing the product to buyers—MVPD service providers and advertisers—(i.e., out- bound logistics) have more limited value-creating opportunities com- pared to other parts of the value chain. The key to create competitive advantage at these two stages would probably be activities that improve efficiency and result in better cost control. The primary activities associ- ated with transforming inputs into the final product form (i.e., opera- tions), on the other hand, are vital to adding value to the MVPD product, especially in areas of content selection and scheduling. Marketing and sales are another critical set of primary activities because the selection of the right distribution channels (e.g., leading MSOs), effective promotion and branding of the programming products, and productive sales forces (e.g., ad sales) produce tremendous value for MVPD programmers. Fi- nally, service activities, although not as significant at this stage, may become more important in creating value through content and function enhancement as more interactive, broadband-based programming ser- vices are introduced.
We also believe that among all supporting activities, infrastruc- ture-related activities such as effective strategic planning and highly de- veloped information systems that enhance these firms’ understanding of customers programming preferences are essential sources of compet- itive advantages. Note that because numerous MVPD programmers are part of a diversified media firm, their infrastructure activities are split between the business unit and corporate levels. In many cases, the rele- vant corporate activities contribute significantly to creating value for the business unit. Procurement is another major set of supporting activ- ities, especially in gaining access to creative talents, agents, and contents to control costs and increase the quality of their products, thus adding value in the process. Finally, whereas developing incentives to encour- age creativity might be a source of value for human resource manage- ment activities, investments in technologies that enable better differentiation and multiplatform presentations would gradually be-
come more essential for the success of MVPD programmers in the emerging digital media market.
Figure 6.1 also details the value chain for MVPD service providers. Al- though all the categories of primary activities are present and play a role in deriving competitive advantages, we believe that marketing and sales activities, especially those that enhance the packaging, branding, pro- motion campaigns, and innovative e-commerce and ad sales mecha- nisms, would add the most value to these firms. As more new media, broadband-based services become available, outbound logistics that im- prove the friendliness and efficiency of the service delivery (e.g., set-top box) and service activities that boost the perceived value of the products are likely to contribute to the building of competitive advantages for these MVPD firms.
There are many sources that a multichannel media service provider might look to for adding value through its supporting activities: a flat- ter customer service representative (CSR) structure that could respond more efficiently and effectively to subscribers who have bundled or a wide range of services (rather than a departmental, hierarchical CSR configuration); technological activities that focus on developing new consumer-centered rather than technology-centered media products; and procurement activities that emphasize access to valuable, branded content and the acquisition of content enhancement technologies.
A firm’s value chain is also embedded in a larger stream of activities called the value system, where each channel member’s output adds to the channel value of the overall system (Porter, 1985). Gaining competi- tive advantages would depend on understanding both a firm’s value chain and how the firm fits into the total value system. Within the same industry-wide value creation notion, Wirtz (1999) proposed that there are five stages in a multimedia value chain. They are the content/service creators who provide program contents/services, the content/service aggregators who combine various contents/services to create multiple program bundles, the value-added service providers who develop and offer new services on existing platforms, the access/connecting facilita- tors who undertake the transmission of the contents and services to the customer, and the navigation/interfacing suppliers who provide cus- tomer navigation tools. In essence, the system of value chains here rein- forces Porter’s proposition of analyzing an industry by segmenting its market activities that add different values to the final product (Timmers, 1998).
Figure 6.2 depicts the total value system for the emerging MVPD in- dustry, which takes into account the growing role of other new media, broadband-based services. The value system begins with the content creators’ value chain. Whereas the core activity for this stage is content creation, the most critical competencies or resources that might gener- ate significant value for the firms here are access to talents and capital for content development and the syndication rights for their creations (i.e., the right to maximize profit through the content-windowing

strategy based on the notions of price discrimination and market seg- mentation) (Waterman, 2000). Some examples of the firms and busi- ness units involved at this level are film studios such as Universal and television producers such as CNN. The next stage of the value-adding process is packaging, which includes content aggregators (i.e., pro- grammers), whose core activities are to assemble contents into packages that appeal to different segments of customers. The most critical core competencies or resources for these firms are access to popular mass-appeal content and/or niche content; access to distributors; capa- bility of repackaging content for different user segments and/or distri- butions systems; and expertise in areas of marketing, brand

management, and publicity. Examples of a programmer/packager would be MSNTV, USA Network, and broadcast stations like WGN. The next group on the value chain, though essential for the functioning of this market, is not as visible to MVPD consumers. The supporting ser- vices basically exist to enhance the operations and marketing of MVPD products, especially for the packagers and distributors. These services may include billing and marketing specialists, consumer information experts, and other consulting firms. Because of the complexity and im- portance of matching the right product with the right segment of audi- ence in a market full of choices, the core competencies or resources for these firms are consumer knowledge, technology know-how, brand management expertise, and creative use of information. Examples here include companies like Kagan Media, Nielsen Media Research, and Jupi- ter Research. The next group, the interfacing/navigating facilitators, adds value to the overall system by providing navigation, interfacing equipment, and software programs that enable easy access to MVPD content, thus enhancing the value of the content. These firms’ core com- petencies or resources for success are technology know-how, consumer knowledge, cost management, and access to distributors. The examples are software developers and hardware manufacturers such as Microsoft and Motorola as well as content management services like TiVo. Note that to be the first firm to introduce or market a navigating/interfacing technology will also increase the likelihood of success because of a first-comer’s ability to set industry standards and influence consumer demands. The final group in the total value system is MVPD service pro- viders, including cable system operators, DBS, and other minor multi- channel media providers. The service providers offer an infrastructure for the delivery of multichannel video contents and manage the interac- tive access to these contents or additional services. The most significant competencies or resources are access to a mass consumer base for scale and scope economies; relationships with the navigating/interfacing fa- cilitators; and the ability to provide a seamless, efficient network or in- frastructure. Note that there are also critical linkages between different value chains and possible dynamic changes as a result of integrations between firms in various value chains through ownership (e.g., News Corp.’s acquisition of DirecTV).
Our discussions thus far of the value chains of the MVPD program-
mers and service providers and the value system of the overall market are based on the notion that by disaggregating a firm’s activities into strategically relevant sets of actions, we might be able to identify the sources of competitive advantages. That is, we can identify compo- nents that an MVPD firm can work on to develop better cost structure, differentiation, technological applications, and other strategies that bring forth above-average returns. We believe that because of the mul- tiplicity of this industry and the increasing service variety propelled by new technologies, such a value source analysis is becoming even more essential.

FINAL THOUGHTS
The MVPD market has grown tremendously in the last two decades with two major system contenders, DBS and cable television, and more than 330 programming networks. With limited threats of substitution and new entrants, as well as extensive clustered consolidations in the ca- ble sector, the MVPD industry is well positioned to implement the next phase of new broadband and interactive video services. In fact, the growing multiplicity of product offerings, the existing diverse pro- gramming sources, and distribution platforms present an ideal mecha- nism for strategic competition and thus a fertile setting for media strategy studies. Vertical integration, international diversification, joint-venture alliances, brand extensions, innovation management, corporate entrepreneurship, and many more market behaviors are ripe for the empirical testing of strategic management and other economic theories in a media context. In fact, as technological advances transform the MVPD market, we are likely to see the addition of more broadband and telephone communications products available along with video programming offerings, making MVPD a contender also for advanced telecommunications services. This chapter has focused on the general is- sues of the MVPD industry. As it continues to evolve in response to tech- nological developments, the interactive/enhanced television and broadband telecommunications aspects of the market will become more evident sources of competitive advantages. Thus, the next two chapters examine the MVPD as well as broadcast firms’ activities in these two ar- eas and their implications.