Vertical Ownership in Cable Television: A New Study of Program Network Carriage and Positioning
34 Pages Posted: 12 Jul 2012
Date Written: August 15, 2006
Using a 2004 database of 680 cable systems, we provide new evidence that vertical ownership ties affect the availability and pricing of cable television networks. Focusing on four program network groups (basic outdoor entertainment, basic cartoon, basic movie, and premium movie), we find that more frequent carriage of affiliated networks and less frequent carriage of rival networks, a pattern identified by previous empirical studies, persists in spite of extensive channel capacity expansion and digitization of cable systems, as well as new competition from DBS.. We also find that integrated systems which do carry rival networks are more likely to position them on higher priced digital tiers, or in other ways that appear to limit demand for them. Overall, the “non-neutrality” of cable programming menus on vertically integrated cable systems remains a significant phenomenon in this industry in spite of technological changes that might be expected to reduce or eliminate any such effects.
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