Paper, International Seminar on the Media, Columbia University, New-York, March 2010

Transcription

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 citée. / Draft version, should not be quoted. INTRODUCTION 1

2 Bibliography Forthcoming: P.Y. Badillo and J.B. Lesourd (Editors), The Media Industries and their Markets. Quantitaive Studies. Palgrave-MacMIllan, London, forthcoming INTRODUCTION Globalisation New technologies New regulation 2

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? 3

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 4

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 = CR k xi < 1 i= 1 K=4 5

6 THE HERFINDAHL-HIRSCHMANN CONCENTRATION INDEX Herfindahl-Hirschman concentration index (HHI), defined as follows: H H I n = i= 1 ( x i ) monopoly; HHI = 0 perfect competition DI Index TheUSFederal TradeCommissionalsointroducedasocalled diversity index(di) DI m = i= 1 (y i ) 1 This DI index enables one to distinguish between the diversityoftitles,andofradioandtvstationsunderthe control of given owners 2 6

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: N I = H H I m = n i= 1 ( x m i ) 2 THE CASE OF THE FRENCH PRESS 7

8 Historically the 19th century, and the beginning of the 20th century can be considered as a golden ageforthefrenchpress,which,sincetheend of the first world war, has entered into a period of relative decline. In 1914, there used tobe322dailiesfrance,179in1945,butonly 66 in The number of national daily newspapers, which used to be 26 in 1945, wasonlyabout10in2000. Magazines Magazines, and the specialised general public press, has grown from 754 titles in 1985 to 1595 titles in 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) 8

9 French presscomparedwithotherinternational media groups Sales : Le Monde700 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% 9

10 Largerinternational groups Larger media groups, whether national, international, or global (G) are today very important and even dominant in the French press and media as they represent almost half of the sales(62.1%). However, independent groups, some of which are comparatively large, and smaller family-owned firms (FI) still account for a sizable share of the sales(31.3%). Groups in a situation of financial recovery accountfor6.6%ofoursales. 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; 10

11 Various indicators Thelargest4pressfirmsaccountfor45%ofsales; the HHI of leads to the conclusion that the concentration in the French press industry is still low, knowing that, a high concentration starts at a HHI index of This estimate can be compared to the HHI estimated Noam (2003) for all American media enterprises, which was of 750 for 2002, which is a little smaller than in the French case according to our calculations. Excluding regional papers and thus taking into account only the national press, one can calculate a HHI index of , which corresponds to moderate concentration. French daily national press We have therefore restricted ourselves to the French daily national press, with 11 titles (excluding the Herald Tribune). 11

12 Years HHI DI NI Source: Our calculation from OJD data. Various concentration and diversity indexes for the French daily press in 1997, 2000, 2004, 2006 and French Daily Press HHI DI NI

13 French daily national press, The Herfindahl-Hirschman index was found to be equal to (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. 13

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 and 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 and 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. 14

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 French regional press= monopolies in most regions. 15

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

17 Technological evolution and concentration in the TV industry So we have not solve the methodological question i.e. how to evaluate concentration when such quick changes are changing the context technological frontiers and new markets? We propose an analysis (and evaluation of the concentration when data were collected ) of the different sectors of the television (Hertzian, Cable, Satellite, Terrestrial TV) The case of the French Television Hertzian Television only Market share (audience)

18 New entrants LA 5 (Berlusconi) until 1991 (10,9% of the market) ARTE since 1993 (1,7% in 2007) La 5ème France 5 since 1995 (3% in 2007) 18

19 Evolution of the HHI More concentration when Berlusconi stopped And then a constant level 50 Share of Public TV part des chaînes publiques Part des chaînes publiques (hors nouvelles chaînes)

20 HHI for Hertzian TV only France 2 16,7 0, France 3 11,8 0, France 5 3,1 0, Arte 1,7 0, Public 33,3 0, , , TF1 26,1 0, , , M6 10,8 0, , , Canal + 1,7 0, , , ,9 HHI 0, HHI

21 Importance of other TVs New HHI (including other TV) F ra nc e 2 16,7 0,1 6 7 F ra nc e 3 11,8 0,1 1 8 F ra nc e 5 3,1 0,0 3 1 A rte 1,7 0,0 1 7 Public 33,3 0, , , T F 1 26,1 0, , , M 6 10,8 0, , , C a n a l + 1,7 0, , , ,1 0, , , ,9 N H H I 0,

22 HHI, NHHI and NI (Noam Index) 2.2/ Cable industry from competition to monopoly 2000: HHI= 2124 N o os 26 % 0, F ra nce T é lé co m C â ble 25 % 0, N u m é ric â ble 23 % 0, U P C 13 % 0, N T L 2 % 0, D ive rs 11 % 0, %

23 Cable industry : in 2009 Numericable owns the whole cable sector HHI~ / Different market segments 23

24 Methodologicalstakes: a mix of technologies and uses (television, telecommunications and Internet internet Issues It will be necessary to aggregate various segments : Methodological stakes: a mix of technologies and uses (television, telecommunications and Internet ). 24

25 The «matricial» dimension of concentration TELECOMMUNICATIONS INDUSTRY 25

26 DATA? The European Commission does not issue data neither for mobiles nor for fixed telephony Arcep (Regulation Authority in France) gives only aggregate data Moreover Media and Telecommunications authorities are independant (problems to establish coherent data) We obtained some data from IDATE (a well known research foundation in France) HHI for public fixed voice telephony source EC 31/12/2006 HHI of national calls HHI of international calls HHI of all calls

27 Data from ARCEP (aggregate) DATA FROM IDATE Data related to fixed telephony are aggregated with only three groups Historical operator= France Telecom First group of alternative operators= SFR+ Bouygues Second group of alternative operators = Tele2, Cegetel, Neuf Telecom 27

28 Fixed telephone HHI and NI 7000 Trafic téléphonie fixe HHI 3000 Noam Mobile From monopoly to triopoly Orange SFR Bouygues And MVNO (~5%) Emergence of new entrants: MVNO Data from IDATE distinguished these four groups 28

29 29

30 HHI and NI for the mobile phone industry 8000 Parc clients mobiles HHI Noam Internet/Telecom DATA FROM IDATE FT/Wanadoo/Orange Noos NC Numericable UPC France cegetel/sfr Neuf Free club internet AOL tiscali Alice (TI France) Tele2 30

31 HHI for internet access 6000 Parc abonnés haut débit HHI