1 Concentration in the media industry: drivers and quantitative analysis The case of the French media industry The case of the French Television The case of the French Telecommunications Paper, International Seminar on the Media, Columbia University, New-York, March 2010 P.-Y. Badilloet J.B. Lesourd IRSIC, Université de la Méditerranée, Marseille, France Version non définitive, ne doit pas être Version non définitive, ne doit pas être citée. / citée. / Draft version, should not be quoted. Draft version, should not be quoted. INTRODUCTION
31
Embed
INTRODUCTION - Columbia Business School · • P.Y. Badillo and J.B. Lesourd (Editors), The Media Industries and their Markets. Quantitaive Studies. Palgrave-MacMIllan, London, forthcoming
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
Concentration in the media industry:
drivers and quantitative analysis
The case of the French media industry
The case of the French Television
The case of the French Telecommunications
Paper, International Seminar on the Media,
Columbia University, New-York, March 2010
P.-Y. Badillo et J.B. Lesourd
IRSIC, Université de la Méditerranée, Marseille, France
�� Version non définitive, ne doit pas être Version non définitive, ne doit pas être citée. / citée. / Draft version, should not be quoted.Draft version, should not be quoted.
INTRODUCTION
2
Bibliography
• Forthcoming:
• P.Y. Badillo and J.B. Lesourd (Editors), The
Media Industries and their Markets.
Quantitaive Studies. Palgrave-MacMIllan,
London, forthcoming 2010.
INTRODUCTION
• Globalisation
• New technologies
• New regulation
3
A new environment
• No frontiers
• A meltdown industry
Technology and media concentration in France
• New entrant (which controls ICT): Lagardère/
Hachette; Dassault/ Socpresse
• Media concentration: press freedom and free
markets?
4
Organisation of the presentation
*MARKET POWER, DIVERSITY AND THEIR
MEASUREMENTS
*THE CASE OF THE FRENCH PRESS
*THE CASE OF THE FRENCH TV
CONCENTRATION IN THE MEDIA:
MARKET POWER, DIVERSITY AND
THEIR MEASUREMENTS
5
Market concentration indexes
• Several market concentration indexes
available, which are more or less
adapted to a quantitative description of
the intensity of market power
The concentration ratio CRn
• K=4
1xCRk
1i
ik<=∑
=
6
THE HERFINDAHL-HIRSCHMANN
CONCENTRATION INDEX
• Herfindahl-Hirschman concentration index (HHI),defined as follows:
• 1 monopoly;
• HHI = 0 perfect competition
1)x(H H In
1i
2i ≤= ∑
=
DI Index
� The US Federal Trade Commission also introduced a so-
called diversity index (DI)
� This DI index enables one to distinguish between the
diversity of titles, and of radio and TV stations under the
control of given owners
1)y(DIm
1i
2i ≤=∑
=
7
THE NOAM INDEX
• Noam proposes a media-secific diversity index, the
Noam index (NI). Let m be the total number of
independent media outlets. Some of these outlets
with too small audiences (below a given threshold,
for example 1%) are not taken into account. Under
these conditions, the Noam index NI is defined as
the ratio of HHI to the square root of m :
m
)x(
m
H H IN I
n
1i
2
i∑=
==
THE CASE OF THE
FRENCH PRESS
8
Historically…
• …the 19th century, and the beginning of the
20th century can be considered as a golden
age for the French press, which, since the end
of the first world war, has entered into a
period of relative decline. In 1914, there used
to be 322 dailies France, 179 in 1945, but only
66 in 2000. The number of national daily
newspapers, which used to be 26 in 1945,
was only about 10 in 2000.
Magazines
• Magazines, and the specialised general
public press, has grown from 754 titles in
1985 to 1595 titles in 2001.
• The professional specialised technical press is
another strongly growing segment of the
market, from 1109 titles to 1504 titles during
the same period.
• Important evolution in the French press and
media industry (example Dassault/Socpresse)
9
French press compared with other international
media groups
• Sales :
• Le Monde 700 million €;
• Pearson 7 billion €
• Bertelsmann 20 billion €
• Lagardère 14 billion €.
FRENCH PRESS CARTOGRAPHY
• Lagardère media segment (Lagardère Active,
Lagardère Publishing, Lagardère
Services)Lagardère Group (Aerospatial
industry)
• La Provence, Nice-Matin, Paris-Match, Elle
• 1848 (sales)
• G
• 17.80%
10
Larger international groups
• Larger media groups, whether national,international, or global (G) are today veryimportant and even dominant in the Frenchpress and media as they represent almosthalf of the sales (62.1%).
• However, independent groups, some ofwhich are comparatively large, and smallerfamily-owned firms (FI) still account for asizable share of the sales (31.3%).
• Groups in a situation of financial recoveryaccount for 6.6% of our sales.
GLOBAL INDICATORS
• Finally, we calculated several concentration
indexes on the firms, including the market
shares of the largest four, and of the largest
ten groups, and the Herfindahl-Hirschman
Index for all of them.
• CR4 = 45%
• Herfindahl-Hirschman Index (HHI) : 791.4;
11
Various indicators
The largest 4 press firms account for 45% of sales;
the HHI of 791.4 leads to the conclusion that the concentrationin the French press industry is still low, knowing that, a highconcentration starts at a HHI index of 1800.
This estimate can be compared to the HHI estimated Noam(2003) for all American media enterprises, which was of 750for 2002, which is a little smaller than in the French caseaccording to our calculations.
Excluding regional papers and thus taking into account onlythe national press, one can calculate a HHI index of 1206.3,which corresponds to moderate concentration.
• We have therefore restricted ourselves
to the French daily national press, with
11 titles (excluding the Herald Tribune).
French daily national pressFrench daily national press
12
•
• Source : Our calculation from OJD data.
• Various concentration and diversity indexes for the
French daily press in 1997, 2000, 2004, 2006 and
2008
Years 1997 2000 2004 2006 2008
HHI 2421.8 2283.4 2443.7 2345.8 2434.2
DI 1218.7 1366.6 1439.0 1441.4 1495.9
NI 368.5 412.1 433.9 434.6 451.0
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
1997 2000 2004 2006 2008
French Daily Press
HHI
DI
NI
13
French daily national press,
• The Herfindahl-Hirschman index was found
to be equal to 2434.2 (2008), a quite high
figure, reflecting a strong concentration of
French press groups on the segment of
national dailies. However, with 11 titles, the
Noam diversity index is at a much lower
value of 451.
The regional press: a very high concentration
• If we discuss the case of the regional press, in most
regions, there is just one daily newspaper. These
monopoly situations are expected, since there are
important economies of scale in the production of
information.
•
14
The regional press (2)
• One can, however, calculate HHI and NI in two regions where
there is more than one daily : Alsace, with two competing
titles (L’Alsace-Le Pays and Les Dernières Nouvelles d’Alsace),
et la Lorraine with three competing titles (L’Est Républicain, Le
Républicain Lorrain, and Est Eclair).
The regional press (3)
• This calculation leads to HHI estimates of 5343.5 and 4415.9
in 2008 for, respectively, Alsace and Lorraine, which
correspond as expected to very high concentrations and
duopoly situations (two competitors). A similar conclusion can
be drawn from the evaluations of the NI indexes, which are of
3778.4 and 2549.5 for, respectively, Alsace and Lorraine.
These figures can be compared with the HHI of 7621 (Noam,
2004) in the case of the American local press, with the same
phenomenon of a quasi-monopoly situation in most states
and cities.
15
CONCLUSIONS
CONCLUSIONS
• For the whole press industry, HHI shows a concentration process, but competition is still important (HHI< 1000)
• New entrants and higher competition:
– Prisma-Bertelsmann, EMAP, PRISA.
• Some French groups (Lagardère) are very present at the world level.
• HHI very high for the French national press (2434.2), varying little since 2000.
• French regional press= monopolies in most regions.
16
The case of the French Television
The case of the French Television
• An interesting methodological questions:
– Metamorphosis of the sector wtih new technology
and new entrants
• Hertzian television (traditional television)
• New entrant like Canal Plus in Hertzian television
(1984)
• New technology like Cable launched in 1982
• Satellite in the 1980’s
• And TNT (Digital Terrestrial Television) which will be
substituted to Hertzian Television by the end of 2011
17
Technological evolution and Technological evolution and
concentration in the TV industryconcentration in the TV industry