Changes in the Media Ecosystem and Strategic Implication for the Participants: Platform Strategy in Two-Sided Markets
Authors:   Asia-Europe Perspective Association, Park Chanhi 
Published: June 2018

ICT ecosystem is an outcome of evolution. A vareity of business partners and users interact with each other based on the ecosystem of CNPT(Contents - Network - Platform - Terminal). The same logic is applied to the media business. Prevalent use of the ‘personal media device’ has changed the landscape of media consumption pattern. At the core of the value chain is the mobile contents which make user experience and user interface. In the business eco-system of CNPT, a player capturing user-interface enjoys platform leadership. Why was camera included in the smart phone? Why wasn’t the communication function to the camera? User experience has a pivotal role in the formation of user interface. Why does smart phone companies sponsor TV dramas or movies? With so many heart-pounding memories related with the smart phone, user experience grows in the minds of users. What is the reason for the Hyundai Moror Comapny’s aggressive sponsorship to the art exhibitions? With the rise of the autonomous vehicle and connected vehicle (coupled with the electronic vehicle), Hyundai Motor Company need to build premium user experience (in turn, premium user interface) through the artistic event. Without its own operating system and processor, it needs to highlight design capavilities. Transmission and consumption of digital media contents do not have as high barrier as traditional contents with the smaller need of physical delivery. OTT(Over the Top) is the illustrative case of the competition toward the platform position. Only with the valid business model (including partnership structure), business participants cannot sustain their position in this rapid change.
Prevalence of mobile devices has brought a significant change in media eco-system. Contrary to the traditional media eco-system led by the media firms, media users have much stronger initiative. Without meaningful contents, traditional media firms cannot sustain their position. Convergence of media devices pose another threat (as well as opportunity). Globalization of the ecosystem is a natural outcome. Digitalization of media contents has lowered the barrier of physical delivery and censorship. ‘Open and shared’ communication is the other face of this change. Hegemony of the traditional media is threatened. Players in the changed business eco-system are trying to build platform leadership by capturing user experience and user interface.
Recent development in industrial economics provide meaningful insights. Theories about network externality and cross-side network externality explain the creation and distribution of value in the media eco-system. Evolution of platform in the media eco-system is also explained by this theoretical frame. Prevalence of SNS also pose big opportunity and threat to the various participants of media eco-system.
This study attempts to identify the critical features of this change, and propose the strategic implication for the various participants in the ecosystem. The focus of analysis will be laid on the role of the telecommunication service providers. Based on the liaterature review, there was a critical review of company reports (internal reports, consulting reports, meeting minutes, and mangement memos). Interview with the working managers were also included. In order to avoid sujective construal, this study tried to validate the various data points and observation points through careful triangulation.
This study is expected to propose a couple of key ideas. Firstly, faced with the growing diversity of media devices and content providers, securing killer contents which lead user experience and user interface should be the biggest challenge. Secondly, in the short-run, VR(virtual reality) will make an important factor in the creative as well as executive production. Thirdly, pricing and promotion of the business participants require rigorous economic analysis on the network externality and cross-side network externality.