یه مرور خیلی کوتاه و ساده از فصل به انگلیسی و فارسی بنویس   Business Models and Value Creation in the TV Market


	
In past decades, the television has progressed to become one of the most important and most high-powered media (Wirtz and Schwarz 2001). The US-American TV market has assumed a leading position through the development of television into its modern journalistic, social, and economic meaning. Hence, the United States is considered the most important television market worldwide. Before the background of the advancing globalization and the converging industrial sectors, the television plays a central role, in particular in competition of the market-dominating multina- tional media groups (Wirtz and Elsäßer 2016).1


	Range of Services

The products offered by television stations can be categorized according to a variety of criteria, e.g., public service broadcasters or private companies. Another more profound category would be the revenue achievement of the companies. Accord- ingly, it can be distinguished between the service range of free-TV and pay-TV
providers. While advertising revenue and feesnance free-TV companies, the revenue model of the pay-TV companies aims at charges on the recipients markets.
Teleshopping and call-in TV are in a unique position. Figure 8.1 provides an overview of the range of services of TV companies.


	Free-TV

The free-TV model provides fees and advertising revenues for thenancing of the enterprises. For the recipient the use of the TV offer is free of charge; the program
provider generates his revenue with advertising. Ultimately, the advertisers pay for the attention of a specic target group. Free TV can be categorized by scope of the program: full, special-interest, and local channels. However, although this subdivi- sion is basically independent from the companies’revenue model, it does not make sense for pay-TV as it offers only special-interest programs.
A full program is a channel with varied content, in which information as well as entertainment is an essential part of the offer. Full channels tailor their offers to a broad group of recipients. A specialization according to the interests of a predened target group does not take place. Special-interest channels, however, are channels
with similar content and focus. Examples of such special-interest channels are news television stations like Bloomberg TV or CNN, documentation channels like Dis- covery Channel or National Geographic, and sports channels like ESPN or CBS College Sports.
Local programs are programs that are produced and distributed in a regionally limited broadcasting area. Local television traditionally plays a more important role in the United States than in other television markets. This is partly due to the size and
structure of the nation’s population. Densely populated metropolitan areas like New York or Los Angeles are their own independent sub-markets, which even
spread over different time zones. It also depends on the structure of the television station on the US television market.
The large networks only provide the individual broadcasting stations with a framework program. The remaining broadcasting time is covered by the O&Os (especially in the big centers) and afliates with their own, often local program
contents. Hence, the local—or at least partially local—TV isrmly established in
this basic structure. Additionally, there is a large number of smaller, more indepen-
dent, and often also public (mostly organized in PBS) broadcasting stations that often only offer local content (Stein and Evans 2009).
 
	Range of Services	141
	Pay-TV

Pay-TV stations differ from other providers mainly through their way ofnancing. In contrast to free-TV stations that are mainlynanced through the advertising markets,nancing of pay-TV companies happens through the recipients markets. Viewers, who are not willing to pay, need to be excluded from consumption.
Therefore, the television signal is initially encoded and decoded later on at the customers’house using an appropriate decoder. Pay-TV stations’offers need to be visibly different from that of free-TV stations and meet the customer requirements. Otherwise the recipients will not be willing to pay for the offers of the pay-TV stations.
Pay-per-channel mostly charges the viewer a monthly charge for the right to receive all channels or programs of the according pay-TV station. This form of pay-TV is also called subscription television. The television company realizes transaction-independent media usage fees on the recipient markets. Pay-per-view is different since the viewer only pays for programs that he actually consumes. Pay- per-view is transaction-based. Hence, the television station realizes transaction- dependent media usage fees.
Video-on-demand (VoD) is a service that allows the viewers to select a desired program using their interactive television set respectively set-top box regardless of the scheduled time. Therefore, VoD enables the viewers to create their own televi-
sion content and schedule their own viewing time. Additionally, VoD allows the programs’interruption at any time and the repetition of individual passages.
The technical aspect that facilitates these options is a reverse channel from the users’receiver to the television provider. In that way, the customer commands the central computer, e.g., to order movies. Therefore, the customer needs a device that
is equipped for digital reception. Internet capable personal computers may also be deployed as receivers.
The Internet is capable of providing reverse channels and therefore already offers the possibility to use video-on-demand. Due to the prevalence of broadband Internet connections, many households have sufcient bandwidth to transmit high-quality TV contents through the Internet by now. For upcoming years, a continued increase is to be expected. It is assumed that the numbers of users for video-on-demand will increase signicantly in the coming years.
The concept of near-video-on-demand (NVoD) is another option to further
personalize the TV program while considering the technical limitations of VoD. Near-video-on-demand broadcasts identical content on several transmission channels in a time-shifted manner. The viewer might not be able to freely choose the starting time of a program, but due to the broadcasting of the program on different channels (e.g., every 15 min), he nearly chooses his favorite broadcasting
time. Near-video-on-demand therefore has the benet to require signicantly lower transmission capacities. It is not necessary to respond to a large amount of user
queries individually since the transmitted content does not have to align with individual demands.
 

	Teleshopping and Call-in-TV

The companies that provide teleshopping and call-in-TVnance themselves entirely or partly through the recipients markets. Unlike pay-TV and similar to free-TV, the program is broadcasted free of charge. Contrary to traditional free-TV, however, the
recipients are asked to purchase a product (teleshopping) or to actively participate in the current television action (call-in-TV). Financing is based on the revenues from shopping or the charge for the calls.
The term teleshopping refers to the sales of products through the medium television. The initiation of business transactions between offering companies and the consumer is based on the medium television. The phase of concluding the contract is based on another, bidirectional medium (e.g., telephone) (Blumenthal and Goodenough 2006). With interactive TV this order can be concluded directly via the television without changing the medium. Beside the operation of a channel with full-time purchase offers, for example, through the leading shopping television station QVC, teleshopping stations may run sales windows on other channels. In both cases the company can resort to a broad service range that mainly differs in type and length of product presentation.
Call-in-TV (also called“participatable television”) integrates the viewer into the actual television action. He is expected to participate actively in the course of the program via phone calls or text messaging against payment. The segment’s service range extends from individual TV programs that integrate call in actions into the
format (e.g., American Idol), over TV stations whose programs are purely based on
“participatable”shows.
Call-in-TV integrates the viewer using a variety of instruments. In some cases, the viewer may vote for or against something and hereby inuences the current and future action of the show. Another common format is Quiz programs, in which the recipient is asked to solve a riddle. Generally, both call-in-TV formats provide the viewer with a chance to win and therefore offer an incentive to encourage his
participation.


	Interactions of Market Participants

In the TV market a large number of different actors operate. These actors and their interactions are described below in an aggregated manner. Due to their importance to the entire TV markets, the program providers are the main actors. They either directly or indirectly interact with the remaining actors of the TV industry. There
are two primary kinds of program providers: broadcasting networks and cable/ satellite networks. Additionally, these providers can be classied in regard to whether these providers offer their program as freely receivable (free-TV) or if the program contents need to be paid for separately (pay-TV).
The broadcasting organizations often combine a variety of the TV market’s features under one umbrella. This may include program production and marketing
 
	Value Creation Structures	143
as well as the creation of program packages. Today, many broadcasting organizations belong to strongly, vertically and horizontally, integrated enterprises that are also active in movie production and rights trading as well as other media markets. The program providers transmit their contents to the recipients. Thereby, so-called broadcasters do the technical distribution of signals. Nowadays, this is achieved by means of one of four transmission paths: cable (classical television cable network), satellite, terrestrial radio, or the Internet (e.g., DSL/VDSL via telephone line).
Broadcast hosting is not necessarily done by an external provider. Large media enterprises usually own the necessary transmission technologies within the enter- prise. The recipient market is the most important source of revenue for pay-TV stations. Pay-TV providers realize revenues directly from the recipient market. The recipients pay fees in the form of subscriptions or one-time payments (e.g., for VoD services) directly to the program provider.
Beside the recipient market, the advertising market is of great importance in particular to free-TV. The television stations sell broadcasting time to the advertising companies, which they in return can use for commercials. Advertising companies may also sponsor individual program categories. The broadcasting stations get
directly in touch with the recipients by means of advertising and brand management. Conversely, the television stations receive the recipients’attention and contacts that they again may employ in the advertising market.
The broadcasting stations can refer to three central procurement resources. This includes human resources (e.g., actors, authors, or editors) and program contents and rights. A further distinction is possible between external and internal procurement of resources. The extent, to which program content is produced independently or procured externally, depends largely on the structure and size of the individual broadcasting station, especially when creating program content. Broadcasting stations can also trade rights directly. Figure 8.2 shows the main actors and interactions in the TV industry.


	Value Creation Structures
The value chain in TV companies can be divided intove steps. Therst step is the procurement of required input factors. These consist, on the one hand, of content such as screenplays, broadcasts, and feature movies and, on the other hand, of the
required technology and human resources. Here actors, hosts, and editors can be regarded as examples. Procurement is followed by program production as a second step, which is the production of single programs. With format, movie and sports rights program trading can be conducted based on the production layer. Trading these rights is part of the third step of the value chain.
The fourth step of the value chain is the arrangement of single broadcasts and programs to create a programow. Finally, the created program is broadcasted in the

course of program distribution—stepve. Here a specic feature of TV companies’ value creation can be seen. Program distribution and technical production of the media service coincide. For television stations, marketing is of high importance
regarding their positioning in the viewer’s market (Blumenthal and Goodenough 2006).
In contrast to print media, where technical production, i.e., the print, comes before distribution, the technical production in TV companies consists of program broad- casting, which is adequate with distribution. The value chain of TV companies is imaged in Fig. 8.3.


	Core Assets and Core Competencies

The core assets of TV companies are employees, the brand, the networks, and the geographical scope. Concerning the employees, their creative potential and interac- tion patterns within the teams play an important role. The TV station signals a program prole through a TV brand to commit viewers to the TV station. For
example, a network of efcient TV producers can secure the supply of attractive
content. However, the procurement of exclusive information often takes place
through personal contact networks as well. For advertising clients the geographical scope is an important criterion in advertising—the higher the reach, the higher the accessible advertising revenues by trend.
In order to use core assets, the four core competencies—content sourcing com- petence, content creation competence, format competence, and cross-media
 
marketing competence—are of superior importance for TV providers. Within the scope of the content sourcing competence, competitive edges in the TV markets can
be reached by the procurement of attractive contents for TV programs. The content creation competence of TV suppliers consists of subcompetencies described in Chap. 3.
A high content creation competency allows the creation of unique TV programs, which generate differentiation advantages toward competitors. Regarding product development competence that is also known as format competence, the integration of different revenue sources into the program formats is becoming increasingly important. Cross-media content utilization as a core competence of TV companies facilitates the utilization of programs and generation of revenue through different channels, e.g., utilization of shows and series via TV, Internet, as well as music and print products.


	Business Models

The business models pursued in the television industry can be associated with two basic business models. In particular, these are advertising-nanced television stations (free-TV), fee-nanced television stations (pay-TV), or hybrid forms of both revenue models (pay-TV with commercials). This immediately affects the
revenue model as well as the range of services offered by companies. Hence, this division of business models can create homogeneous groups with low overlapping. However prior to explaining the business model of a free-TV station, the TV market’s revenue and service creation model are presentedrst.


	Revenue Models

Within the scope of the business model, different revenue forms can be distin- guished. In the rights markets, revenues are primarily achieved from trading movie and sports rights. The advertising markets represent another source of revenue, which play a central role in particular in the business model of the freely receivable broadcasting stations. Besides the original advertising in the form of TV commercials (block advertising or split screen advertising) a series of other, younger revenue forms in the advertising markets exists.
These are sponsorship, teleshopping commercial game shows and product place- ment. Together with advertising, they are theve main forms of offers in the TV advertising markets. Product placement also refers to revenue forms achieved in the advertising markets. In this context, advertising companies provide stage props or other goods to television companies for in-house productions free of charge for a
certain period. In return the corresponding (branded) article is placed systematically within the program’s broadcast.

In addition to the main advertising forms, there are two forms of income, which are not directly connected to the TV advertising market. Firstly, bartering, at which the advertising demanders make program material available to the TV companies and receive advertising space in return. Secondly, TV suppliers can exploit rights by means of merchandising. Figure 8.4 gives an overview about the different forms of advertising, which provide the possibility of generating revenue in advertising markets.
In the recipients markets revenues can be generated in the form of fees for media access and media use (pay-TV) as well as in the form of payments for T-commerce activities. In particular, the fees for the acquisition of decoders for the reception of pay-TV or installation costs for the access to such offers contribute to the fees for media access. Payments for media appear as transaction-dependent fees, such as payment per movie with the pay-per-view TV, or in forms of payments independent of transaction, e.g., for a pay-TV subscription.
The T-commerce industry and in particular the TV stations’own teleshopping offers and telephone services within the scope of call-in-TV gain importance for TV
companies as a source of revenue. Meanwhile, especially the call-in-TV-formats play an important role in the TV sector.


	Service Creation Model

The service creation structure in the TV industry is of particular importance to the management of TV companies. The main task of TV companies is the production and marketing of TV programs. Different processes must be dened, coordinated, and executed within the company. 

The core processes, which are the drivers of service creation, are shown in the service creation model. Based on service creation model, starting points can be identied by the management for process improvements. The service creation model shown in Fig. 8.5 provides information about the fragmentation of revenue sources and cost structure of TV companies.
The revenue mix of a TV network can be seen in the composition of revenues. About 86% of overall revenues are accounted for advertising revenues. About 14% of the revenues on average are earned by transactions and added value services like merchandising and call-in-programs.
The distribution costs of TV suppliers are relatively low with 12%. The share of therst copy costs in the overall turnover amounts 78%, so that considerable economy of scales has to be achieved through high geographical scopes. 61% of the overall turnover account for content production, which amounts to the largest
cost pool of TV companies. The prot is approximately 10%; however, there are distinct differences between the providers.
 
	Business Models

Commercial television stations dominating the TV scenery in the United States follow the aim of maximizing prots. The distinction between advertising-nanced companies (free-TV) and payment-nanced companies (pay-TV), whose revenue model is aimed at the advertising markets or recipient’s markets, is maintained.
Due to the alignment of their revenue models, the offered services of commercial free-TV stations clearly depart from the offer of payment-nanced television stations. For private free-TV stations, the attractiveness of the offer mainly depends on the (advertising-) relevant target group since only a mass appeal program offer manages to establish recipients’contacts for the advertising industry.
Concerning the payment-nanced private TV providers, the signicance of
attractiveness of the program offer is immediately evident. The recipients are only
willing to pay fees for a program offer which they consider attractive. Teleshopping stations and call-in-TV stations have a special status in the area of TV providers. The business model of teleshopping stations focuses on the sales of goods and services, whereas call-in-TV stations focus on the motivation of viewers to actively engage in the program by phone.
Figure 8.6 shows a simplied version of an advertising-nanced private televi- sion station. It becomes clear that the advertising space is a key component of the
service range. This immediately results from the importance of the advertising markets for the revenue generation of the company. Nevertheless, the success in the advertising markets is decisively inuenced by the success in the recipient markets. Hence, attention has to be paid to attractiveness and quality of content.
The advertising returns are increasingly complemented by revenues from added value services with costs and transaction revenues. Through these additional revenue forms, the TV stations can reduce their dependence on the advertising revenues that are strongly susceptible to economic situation.
Meanwhile, shows with telephone-based participation elements, in particular, have a large proportion of the entire program of the TV companies. Moreover, big media enterprises are increasingly involved in e-commerce to further upgrade their revenue basis. News Corporation (Fox) cooperates with Disney (ABC), Time Warner (CBS), and NBC Universal on the online video platform Hulu (2011c).