The new book by Augusto Preta
Out on 23 January


The entertainment industry and, in particular, the traditional TV sector in Europe are going through profound changes, driven by factors of global dimension, such as the digitization of audiovisual contents and the convergence of media with telecommunications and internet.

The digitization of audiovisual contents has expanded transmission capacity and content offer: the switch-off process from analogue TV to the digital TV in many European countries has allowed the development of new channels, non-linear pay services and new business models. The convergence process is simply bringing a revolution: unprecedented level of innovation and consumer empowerment, new content providers and aggregators at global level (the so called “Over-The-Top” players: e.g., Facebook, Apple, Google, Netflix), new forms of content (e.g., user generated content and social media) and premium content (e.g., TV series). Online video content is resulting a key driver of internet traffic growth. In addition, new devices (smartphone, tablet, smart TV) and new online distribution services in between cinema & pay-TV are making consumers to watch TV everywhere and anytime.

Advances in the economic theory (e.g., the multi-sided market theory) have contributed in a better understanding of the complexity of the TV sector and its transformations. These contributions have shed lights on several aspects of the functioning of the sector, pointing out potential errors and risks that antitrust authority must take into account when performing their market definition analysis (e.g., SSNIP test).

In light of the industry changes and new economic models, the volume attempts to identify factors concretely affecting the definition of relevant product market in the TV sector provided by the European Commission and the national competition authorities in Europe. Indeed, the degree of evolution of these potential factors over the last ten years could suggest a revision of the existing market definitions, generally based upon the distinction between pay-TV and FTA-TV.

Based on a review of the issues highlighted in the most important antirust decisions in the TV sector, the paper suggests some indicators with the objective to monitor trends of several factors of increased substitutability and competitive pressure between pay-TV platforms and FTA-TV which, on a forward looking perspective, may require a revision of the definition of relevant antitrust market in the TV sector.

The following groups of indicators are suggested:

• Indicators of competitive pressure (substitutability) between the FTA-TV and pay-TV;

• Indicators of competition for the audience (competition for viewers);

• Indicators of competitive pressure of "non-premium" components of pay-TV offer (variety, quality);

• Indicators of relevance of film and football as key drivers for pay-TV subscriptions.

The study is divided into three parts. Part 1 describes the main economic features of the television industry and the value chain, highlighting the critical issues related to market definition and its implementation (the SSNIP test), due to certain features (eg, the nature of multi-sided markets) . Part 2 presents an overview of antitrust decisions of the European Commission and national antitrust authorities, highlighting the main distinction criteria developed by the antitrust authorities. Finally, Part 3 defines the indicators, applied to the national context, that track the evolution of the market and the existence of substitutability factors and increased competitive pressure between pay-TV and FTA-TV since the decision NewsCorp / Telepiù of 2003.





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