Survival of Digital Television Business Analysis

Abstract

The purpose of this analysis is to study the impacts of digital television bidding competitions upon digital television operators after three years of operation by three conceptual dimensions under the Structure-Conduct-Performance (S-C-P) approach. Secondary data are used to analyze the various factors affecting the competitiveness and profit-making ability of digital television operators; for instance, the size of television viewers, advertising value in the television business, television program ratings, government policy and marketing strategy. The findings indicated that the digital terrestrial television business as a national type confronted various barriers to entry; for example, laws and regulations that prohibited new players from entering the digital television business for the next 15 years onwards since the old licenses of all winning bidders are not yet expired. In addition, a large amount of funding is needed to bid at auction as well as sufficient working capital to operate a digital television business, particularly at the early stage. These are all major obstacles. The increasing number of digital television operators after the auction resulted in intense competition among digital television operators for advertising revenue. Hence, the marketplace survivors must differentiate themselves through creating new target markets, directing their activities towards niche markets, creating television programs with more interesting high quality content, matching attractive programming target viewers, selecting appropriate air-time, and creating awareness and recall among viewers. Consequently, these steps will help increase television program ratings and lead to higher revenues for television stations.