Bundling, Differentiation, Alliances and Mergers: Convergence Strategies in U.S. Communication Markets

Communications & Strategies, No. 60, p. 59, 2005

25 Pages Posted: 5 Apr 2007

See all articles by Johannes M. Bauer

Johannes M. Bauer

Michigan State University-Department of Media and Information

Abstract

Convergence is a multi-facetted phenomenon affecting the technological basis of information and communication industries, the boundaries of existing and new markets, and the organization of service providers. Convergence in substitutes will tend to increase the intensity of competition but convergence in complements may have the opposite effect. Given the economics of advanced communication industries, convergence necessitates strategies to overcome the risk of commodification at the level of networks, applications, and services. The paper examines bundling, differentiation, alliances, and merger strategies adopted by North American service providers in response to convergence. Service providers'opportunities and risks in the emerging environment differ considerably, with cable and telephone service providers presently in stronger positions than wireless service providers, broadcasters, and satellite service providers. New entrants such as Vonage, Skype, Google, and Yahoo have high disruptive potential but remain disadvantaged without their own access networks.

Keywords: convergence, bundling, differentiation, alliances, mergers

JEL Classification: L90, L96, K23, L41, L43, L51

Suggested Citation

Bauer, Johannes M., Bundling, Differentiation, Alliances and Mergers: Convergence Strategies in U.S. Communication Markets. Available at SSRN: https://ssrn.com/abstract=978372

Johannes M. Bauer (Contact Author)

Michigan State University-Department of Media and Information ( email )

409 Communication Arts Building
East Lansing, MI 48824-1212
United States
517-355-8372 (Phone)
517-355-1292 (Fax)

HOME PAGE: http://www.msu.edu/~bauerj

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