Deep Dive Episode 81 – Vertical Integration in Broadcasting: A Cause for Concern?
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The broadcasting market used to be straightforward. It functioned on a linear model consisting of content companies, distribution channels and audiences. The advent of the internet disrupted that model, placing new competitive pressures on traditional players and forcing them to rethink their strategy.
Vertical integration – the common ownership or control of both programming and distribution undertakings – has been hailed as a useful strategy for legacy broadcasters to survive in the new digital environment. Regulators and the courts, to a large extent, have endorsed this rationale. Earlier this year, AT&T fended off an antitrust challenge to its merger with Time Warner, successfully claiming that the merger was necessary to take on platforms such as Netflix, Facebook and Google.
Has vertical integration succeeded in making the broadcasting sector more innovative and competitive? Are additional regulatory safeguards necessary to prevent and sanction anti-competitive conduct? What can the United States learn from Canada, a broadcasting market with higher levels of vertical integration and cross-media ownership?