ABSTRACT
It is evident from our previous discussions about ETV that many telephone companies have had an interwoven relationship with multichannel media firms because of the increasingly blurry market boundaries between different communications networks. No longer regarded as a medium that carries merely user-generated voice content, the telco-based broadband system is now considered one of the essential building blocks of future digital entertainment because its platform enables the delivery of digital videos with the personalization and on-demand nature of the Internet via telecommunications networks (Bratches & Rooney, 2001). In fact, as the two leading broadband service providers (BSPs), DSL from the telephone sector and cable modem from the MVPD market, continue to expand, we are witnessing a new phase of development for the television medium. Just as the introduction of MVPD television added the multichannel, narrowcasting capability to broadcast television, the arrival of the Internet and the broadband infrastructure brought more enhanced functions such as interactivity and personalization to MVPD television. Such an expansion of television functions and content varieties means more opportunities for product differentiation in the marketplace and thus more strategic options for the market participants, now including the telecommunications firms (e.g., telcos) with broadband products. Considering the significant role telcos play in today’s digital media environment, in this chapter, we tackle the broadband communications aspect of the telephone industry and compare the strategic differences between these firms and their MVPD counterparts in the emerging broadband multimedia industry.
