The case focuses on the acquisition and consolidation of DirecTV by media mogul Rupert Murdoch’s News Corp. After the acquisition, Murdoch’s content-and-distribution empire spanned four continents, with more than 26 million subscribers. Murdoch, News Corp.’s chairman, had ambitions to build one of the most powerful media companies in the world. He aspired to have a balance between subscription and advertising revenue, the best mix of content and distribution and the widest geographic spread in the world.
There are a various aspects of the general environment firstly; the political/legal aspect of the general environment was initially most significant in the purchase of DirecTV by News Corp. FTC concerns of potential market concentration issues if EchoStar purchased DirecTV forced the two to drop discussion, paving the way for News Corp.’s purchase of DirecTV. Technology is probably the most important current aspect of the general environment. Secondly, Demographic segment Growing markets worldwide for various communication and entertainment media content. Thirdly, Socio-cultural segment largely due to rapid changes in technology, as well as increased overall globalization efforts, consumers are becoming increasingly sophisticated in the quality and type of communication and entertainment that they expect. Communication, news and entertainment provided by DirecTV and similar services have become viewed as nearly a necessity in a modern world. Fourthly, Economic segment while general economic conditions and level of economic development in a particular country or region may hinder some feasibility of these types of services, in general, they are needed and used by markets worldwide regardless of overall economic conditions. Fifthly, Political/legal segment The FTC, the government’s watchdog arm that oversees competition policy, is responsible for ensuring that consumers’ interests are protected. If an industry is getting increasingly concentrated, the FTC can use antitrust laws to prevent further consolidation of the industry or break up previous consolidation. The FCC, the government’s watchdog arm that oversees the communications industry, is responsible for overseeing companies that sell communications products and services. Finally, Technological/global segment The 1980s and 1990s saw a worldwide race to deliver television programs to global markets. Cable operators invested in laying cables and beamed programming content through these cables into subscribers’ homes. Satellite television had a much wider reach, because satellites orbiting the earth sent the programming content directly into the home without the need for a cable connection. By 2000, cable had an important advantage over satellite in that it offered high-speed, two-way access, including phone capability. Satellite was still mostly one-way. However, it would take cable companies years of multi-million dollar investments to upgrade to digital technology.
DirecTV competes in a broadly defined media industry. Several sectors of this industry might include communications (e.g. telephone, internet, cable, satellite TV), news services, entertainment (e.g., cable and network programming, movies, pay per view, gaming).
There are various characteristics of the dominant industry. Market size is the most providers are regional or national competitors, depending on the facet of media in which they compete. Life cycle stage is growth. Growth rate is rapid. Scope of rivalry is fragmented in some respects, but rivalry is fierce among those that go head to head in specific sectors. Rivalry concentration is the media industry is dominated by large and powerful companies, but most of these are regional, national or multi-national players. Pace of industry change is the technology change is rapid in telecommunications and related fields, which drives significant rapid change in all aspects of...