Happily Ever After? – Vertical and Horizontal Mergers in the U.S. Media Industry

Ilmenau Economics Discussion Papers, Vol. 25, No. 126, 2019

43 Pages Posted: 16 Jun 2019

See all articles by Annika Stöhr

Annika Stöhr

Ilmenau University of Technology

Victoriia Noskova

Ilmenau University of Technology

Philipp Kunz-Kaltenhäuser

Ilmenau University of Technology

Sophia Gaenssle

Ilmenau University of Technology

Oliver Budzinski

Ilmenau University of Technology

Date Written: June 4, 2019

Abstract

This paper provides an economic analysis of recent vertical and horizontal mergers in the U.S. industry for audiovisual media content, including the AT&T-Time Warner and the Disney-Fox mergers. Using a theory-driven approach, we examine economic effects of these types of mergers on market competition, focusing on digital media content distribution.

In doing so, we address three research questions: (i) Is the current development of analyzing industry with its recent merger activity concerning? (ii) Would vertical or horizontal integration be more preferable for overall welfare and competition in this industry? (iii) What are implications for antitrust policy?

We conclude from our analysis that in the already highly horizontally concentrated U.S. market for audiovisual content the process of further vertical integration creates concerns from a competition policy perspective. Moreover, even though horizontal concentration on some of the market stages may be anticompetitive as well, vertical integration is likely to be more harmful. As a consequence, we recommend a stricter approach to vertical merger control in this industry, as well as a more active abuse control against already vertically-integrated media companies.

Keywords: competition policy, antitrust, industrial economics, digitization, media economics, institutional economics, industrial organization, mergers, vertical integration, horizontal integration

JEL Classification: L42, L41, K21, K23, L82, L86, L13, D43, L51, L96

Suggested Citation

Stöhr, Annika and Noskova, Victoriia and Kunz-Kaltenhäuser, Philipp and Gaenssle, Sophia and Budzinski, Oliver, Happily Ever After? – Vertical and Horizontal Mergers in the U.S. Media Industry (June 4, 2019). Ilmenau Economics Discussion Papers, Vol. 25, No. 126, 2019, Available at SSRN: https://ssrn.com/abstract=3398913 or http://dx.doi.org/10.2139/ssrn.3398913

Annika Stöhr (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

Victoriia Noskova

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

Philipp Kunz-Kaltenhäuser

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

Sophia Gaenssle

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

Oliver Budzinski

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

HOME PAGE: http://www.tu-ilmenau.de/wth

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