COMPETITION'S EFFECTS ON PROGRAMMING DIVERSITY OF DIFFERENT PROGRAM

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Competition’s Effects on Programming Diversity of Different Program Types S. Park Competition’s Effects on Programming Diversity

Sora Park Kwangwoon University, South Korea

The public interest goals of television sometimes collide with the goals of market-driven broadcast industries. Because market forces have a pronounced effect on the broadcast sector in most countries, it is important to understand the relation between market competition and public interest goals like program diversity. To find a general pattern governing TV programming in a commercial environment, this study examines the relations between competition and diversity trends for programs oriented toward the public interest and for entertainment shows. The results show that overall diversity is a decreasing function of competition, but that competition’s effects on diversity differ for informational and cultural programs and dramas. Both the degree of competition and broadcasters’ goals for each program genre have important effects on the diversity of television programming.

Research on media diversity has advanced considerably in recent years. More rigorous measures and elaborate relations have been explored and tested with useful results.1 Recent additions to the diversity literature are the conclusions that (a) the degree and type of competition affects the diversity level differently, and (b) measurement of diversity can and must be more robust (see McDonald & Dimmick, 2003; van der Wurff, 2004). We now better understand how competition affects diversity in different situations. However, there is less information on how competition affects different types of programs. Are all programs affected in the same way? Are some types of shows more sensitive to competition than others? To answer these questions we need to develop a more elaborate concept of program types. When broadcasters are faced with competition, they respond not by introducing totally new formats, which would be too risky, but by trying variations of existing program types that have a successful track record. Analyses of program diversity need to acknowledge these subtle changes. New genres develop over time and change slowly. In reality, programs identified as belonging to the same program type are often geared toward different audiences and have entirely different meanings for viewers. Program type or “genre” is

Address correspondence to Sora Park, Kwangwoon University, School of Communication Arts, Nowongu Wolgyedong 447–1, Seoul, South Korea. E-mail: [email protected]

The International Journal on Media Management, 7(1&2), 39–54

not a rigid concept. New genres may emerge from old ones, or two different genres may be blended to create a new one. Oftentimes these transformations reflect changing viewer tastes. In previous research, how many different types of program “genres” that are provided by broadcasters are often used as the measures of diversity? Originally, diversity is held as a programming goal that promotes the public interest, because, it is assumed, when viewers are provided with a full range of programming options, they will make choices that lead to an optimally balanced consumption. Although arguments supporting diversity ultimately seek to address the consumption side of programming questions, diversity is often studied only in terms of supply. Bridging the gap between the diversity of content (supply) and diversity of access (consumption) requires a detailed approach to genre classification. However, in previous studies, genre is often regarded as a fixed set of categories and each category designates the same type of program to viewers. But it is often the case that programs that can be classified into the same genre category can be targeted to audiences with different tastes. For instance, history dramas do not share the same audience with melodramas. So when we say diversity in terms of broad genre category, we may not fully acknowledge the subtle changes and adjustments made to satisfy the diverse viewer tastes. This is especially so when we attempt to compare the diversity measure across years. The

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total number of program types may stay constant but each program category may change within the genre. This study employs a detailed method of program type classification to examine whether competition affects different types of programs in a different manner.

Literature Review Diversity Media diversity has long been studied and debated by media scholars and policymakers alike, both of whom have been especially concerned with the question of whether media provide diverse content and with determining the factors that promote diversity. Wildman and Owen (1985) explained diversity as having three dimensions: access diversity, content diversity, and diversity of ideas. Access diversity refers to the idea that, because media have a gatekeeper function in society, they must provide fair access. Content diversity is the diversity in the programs that the media provides. Idea diversity means that the media should provide a wide array of ideas and criticism without exhibiting a bias toward one viewpoint. Moreau and Peltier (2004) used the terms variety, balance, and disparity to denote three similar aspects of diversity. Diversity of media content can be quantified, but its quality must also be assessed (Han, 1995). It has been demonstrated empirically that an increased number of outlets or channels does not automatically lead to greater diversity. And an increase in available programming choices does not necessarily create access to a more diverse range of ideas (Jacklin, 1978). Napoli (2001) gave an apt summary of the diversity model (see Figure 1), characterizing diversity as having three aspects that correspond to different parts of the communication process: source diversity, content diversity, and exposure diversity. These three aspects are related to one another in a unidirectional way, from source to exposure. To have diverse consumption, we need several suppliers providing a diverse selection of programs. However, the relations among the three aspects have not been

Figure 1.

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explored empirically. Thus, one may ask the following: Does the increase in the number of suppliers bring about a diverse range of programs? Does competition induce differentiation of products? If a diverse range of options is provided, would people choose a balanced diet of programs? If different ideas are competing in the marketplace, would the best choice be selected? According to Van der Wurff and Van Cuilenburg (2001), diversity comprises the two dimensions of open and reflective diversity, where the former signifies the provision of programs that address every idea within society, however minor. The latter signifies the provision of programs that match consumer demand. This distinction is similar to that which Napoli (2001) drew between his concepts of access diversity and genre diversity. Open diversity is a more popular concept within the realm of media policy, especially in the public sector. Broadcasters should provide all possible views and programs. In reality, however, deciding how much programming to allot to each perspective or idea becomes intensely problematic. Do we have to program shows nobody will ever watch? Moreau and Peltier’s (2004) supplied versus consumed diversity also addresses this distinction. The number of program types or genres is the most direct measure of content diversity provided in the marketplace. But this measure is problematic because genres are fluid categories. Genre is a typology that sorts programs according to their internal consistencies and external formats, but this typology changes over time and is often modified under different circumstances. Audiences have certain assumptions about program types, and broadcasters aim to satisfy their demands by meeting those assumptions (Kim & Kim, 2000). Genre is not merely a label designating a show’s format; it is a property of programs that conditions audiences’ expectations. Conceptions of program typology thus need to be revised to facilitate more meaningful measures of diversity. The Korea Broadcast Commission identifies 16 television genres for regulatory purposes. This classification is self-explanatory and useful, but it neither captures differences within a genre, nor does it acknowledge audience

Dimensions of diversity (adapted from Napoli, 2001).

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expectations. The programming choices audiences make reflect a more detailed and complicated division of program types. Park and Hwang (2000) suggested a more refined system that considers viewer demand and tastes, and includes subtle differences recognized by TV viewers. New program types usually evolve from the incorporation of new tastes or demands into existing program types. Whereas audiences make a generic distinction between romantic dramas and mystery dramas, traditional program classifications do not, categorizing both simply as “dramas.” Some generic variations are so substantial that they cannot possibly be classified as belonging to the genre from which they evolved. For instance, new program types such as “infotainment” have evolved from information programs. Genre diversity is important but the diversity within a certain genre must also be acknowledged (Owen, 1978). In addition to establishing appropriate classification categories, researchers must tally the number of objects in each category (Junge, 1994; McDonald & Dimmick, 2003; McDonald & Lin, 2004). Many diversity studies have a descriptive component that seeks to recognize program distinctions even as they count programs that are sometimes quite different as belonging to the same genre. Testing the diversity before and after new entrants in the U.S. broadcast market, McDonald and Lin (2004) introduced the Simpson’s D method to address both category classification and the proportion of objects within categories.

Competition and Its Effect on Diversity Media policy attempts to provide a variety of content from which viewers can choose. To ensure a range of options, a fair amount of competition between program suppliers is essential. Thus far, however, there is no agreement about the levels of competition that foster optimal results. Controversy over the appropriate levels of competition reigns in both the academic and regulatory spheres. These controversies are exacerbated by the different methods of measurement. Although a simple concept, competition is difficult to measure, especially because competitive behavior is not expressed in a uniform way from firm to firm. Porter (1985), for example, defined three types of competitive behavior: cost leadership, product differentiation, and price competition. Cost leadership strategy maximizes viewers and realizes economies of scale. Broadcasters who adopt a differentiation strategy provide different content, often to avoid direct competition. However, this strategy creates rising costs that are followed by price increase and then price competition. The effect of competition on programming strategies will be different according to the structure of the market and the conduct of competing firms.

Competition’s Effects on Programming Diversity

In media markets, the relation between competition and media output is not clear. The haze obscuring this relation is attributable to the fact that it is difficult to gauge the performance of media firms in terms of the content they offer. But gauging the market structure is also often problematic. Van der Wurff and Van Cuilenburg (2001) distinguished ruinous competition from moderate competition. Media firms tend to adopt different strategies depending on the degree of competition. According to Porter’s (1985) theory, a firm choosing the cost leadership strategy maximizes audiences for economies of scale. In this case, content quality need not be compromised, because a firm will invest more in its product to increase audiences. However, in an environment of ruinous competition, broadcasters have little incentive to invest in products, and frequently choose to replicate cheap programs to minimize risk. Applying competition theory to media markets is difficult. Media markets are traditionally dual markets supported by advertisement, which complicates firms’ conduct. When there is moderate competition, broadcasters practice the strategy of product differentiation. Innovations in the production process and cost-leadership strategies are also common, which increases the open and reflective diversity of programs. However, when ruinous competition prevails, broadcasters are more likely to engage in price competition, leading to risk-averse strategies. This usually happens when a newcomer enters the market. Because of the complexity of media markets, studies on media firms’ performance have produced contradictory results. Dominick and Pearce (1976) analyzed network prime-time programs from 1953 to 1974 and found that there was a positive relation between competition and diversity of programming. Litman (1979) also found that when competition increased, the level of vertical and horizontal diversity also increased. The results of Atwater’s (1984) study show that when more broadcasters compete in a market, the number of news items increases but the time allocated to each story decreases. Wakshlag and Adams (1985) analyzed the effects of the Primetime Access Rule on the diversity of programming and found that this regulation reduced both market competition and diversity. The high number of children’s channels on cable television contributed to an increased diversity in children’s programming (Chan-Olmsted, 1996). The increase in the number of news channels resulted in the differentiation of news content (Bae, 2000). Studies of media industries other than broadcasting also provide evidence of diversity increasing with competition (Everette & Everette, 1989; Lacy, 1987, 1988, 1999; Rogers & Woodbury, 1996; Rothenbuhler & Dimmick, 1982). On the other hand, there are studies that support an exactly opposite conclusion (Burnett, 1992; Lin, 1995a). A

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study on news content similar to Bae’s (2000) found that diversity of news declined with competition. According to Lacy (1988), television, cable, and radio did not affect the content of newspapers, and Webster (1986) argued that the increase in outlets does not guarantee an increase in diversity. Einstein’s (2004) analysis of network prime-time programs suggests that diversity has neither increased nor decreased overall since the 1960s, although there were some fluctuations during those years. She used both supplier and program type diversity measures in her study. These contradictory results can be attributed in part to the fact that there is no agreed on measure of competition or diversity. A detailed analysis of how the degree of competition affects different types of diversity shed some light on the problem (Van der Wurff & Van Cuilenburg, 2001). The degree of competition affects both reflective and open diversity but in different ways. Under ruinous competition, reflective and open diversity are correlated, but when competition is moderate, they are not. It is therefore important to indicate the type of diversity being measured and to understand the level of competition prevailing in the market being studied. In Korea there is an ongoing public policy debate about how to promote diversity in television programs (Ahn, Song, & Cheon, 1995; Lee, 1984, 2001; Yoo, 1984). Han (1985) argued that for a long time, the trend was to homogenize TV programs. This homogenization has been observed by many scholars (Hong & Kang, 1981; Kang, 1993) and is attributed to “commercialization of the media,” regulation, and centralized management strategies. Lee’s (2001) study on diversity in the 1990s also shows a steady decline in the diversity of network prime-time programs. Public broadcasters achieved slightly higher levels of diversity. Like the empirical results, theory also offers competing views on how competition affects the performance of media companies. The relation of oligopoly structures to the innovation of media products is thought to be positively correlated because in a market dominated by a small number of firms, these firms have sufficient resources to experiment with new products and ideas (Burnett, 1992). On the other hand, when a handful of firms dominate a market, there is less incentive to differentiate and innovate. Rather, firms will try to reach a larger audience at less cost, replicating products that appeal to the lowest common denominator. When more firms compete in a market, there will be competition to reach audiences by differentiating (Litman, 1979; Rothenbuhler & Dimmick, 1982). The relation between diversity and competition is not easily resolved either in theory or with empirical data. In this study, I examine content diversity from the standpoint of public interest to find how diversity relates to competition in the television market. The overall con-

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tent diversity is known to decrease under certain competitive conditions (Park, 2003; Van der Wurff & Van Cuilenburg, 2001). Increased competition is an indicator of commercialization, which may have different effects on the strategies of programs promoting public interest goals and of commercial programs. Terrestrial broadcasters have public interest goals, which is why low-profit prorams are scheduled despite their lacking economic via bility. Still, profit-maximizing is the primary goal of commercial broadcasters, and there is always a tension between the profit motive and public interest goals. It is interesting to investigate how competition may sacrifice informational and cultural programs to commercial entertainment. Even if competition increases diversity to some degree, this increase may be illusory if commercial programs become more diverse at the expense of informational and cultural programs. Existing studies on diversity fail to make such distinctions. As mentioned earlier, diversity arguments rest on how a diverse range of program types are provided, and sometimes on how equally program types are distributed (Napoli, 1997; Park, 2003; Van der Wurff & Van Cuilenburg, 2001). Several studies have examined how diversity relates to market competition. However, empirical evidence is not consistent. Some studies have found that diversity increases in competitive situations (Atwater, 1984; Dominick & Pearce, 1976; Everette & Everette, 1989; Lacy, 1987, 1988, 1999; Litman, 1979; Rogers & Woodbury, 1996; Rothenbuhler & Dimmick, 1982; Wakshlag & Adams, 1985), whereas others have concluded that the contrary is true (Burnett, 1992; Lee, 2001; Lin, 1995a; Park, 2003; Webster, 1986). Van der Wurff and Van Cuilenburg (2001) proposed a somewhat different view. When broadcasters engage in ruinous competition, the open diversity and reflective diversity have a strong positive correlation, but under moderate competition, this relation was weak. Diversity increases under moderate competition but decreases when competition is severe. Thus the degree of competition is a significant factor in determining programming strategies. The aforementioned studies do not deal with how competition affects different types of programs under particular circumstances. Competition is usually introduced by commercialization of the market, which leads to increased concern about the number of people watching each program. Program type is known to predict the size and quality of audiences; thus broadcasters will prefer certain program genres in a competitive environment. Park’s (2003) study suggests that diversity decreases when competition increases. There was less diversity in competitive time slots like prime. Van der Wurff (2004) observed that, whereas a limited increase in the number of channels promotes diversity, a large increase has the opposite effect.

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The Greek case (Tsourvakas, 2004) also confirms that competition reduces the programming diversity of public broadcast stations. Tsourvakas found that competition forces public stations to imitate private broadcasters’ programming and to homogenize. A study of the movie industry concluded that public support enhances cultural diversity. Although the movie industry is free from the regulations affecting the broadcast industry, this study nonetheless also permits the conclusion that competition at a high level leads to homogenous products (Moreau & Peltier, 2004). Because of the complex and often contradictory character of the data on competition and diversity, there is hardly any agreement on how competition effects the welfare of viewers. We need to study the circumstances in which competition increases or decreases program diversity in greater detail. The primary goal of this study is to examine the overall trends governing the relation between competition and diversity on television when changes occur in the market. Because Korea’s terrestrial broadcasters are obliged to consider “public interest,” the Korean market illustrates how broadcasters combine public interest programming strategies with commercial goals. Competition can be expected to affect different program types in different ways. The secondary aim of this study is to find the differences in strategic programming decisions that firms make about public interest programs and about entertainment programs in response to increased competition.

The Television Market in Korea Korea is a growing market with 45 million inhabitants and over 14 million TV households. The cable penetration was 67.1% in 2003, up from 1.6% in 1995, the year cable television was launched. Satellite penetration reached 3.4% in the first year of service in 2002. As these statistics show, Korea is a fast-growing nation in terms of media and telecommunications. The broadcast industry in Korea is undergoing tremendous change. The most significant change in recent years has been the introduction of commercial broadcasters into the market, not only the terrestrial market but also the cable and satellite TV markets, and a consequent increase in competition for broadcasters. Incumbent broadcasters now compete with newcomers and as the number and proportion of new entrants increases, the industry becomes more and more competitive. To embrace the media industry’s new competitive forces, the government has also introduced policies that reinforce market competition. New regulations, such as programming quotas for independent producers, the privatization of the broadcast sector, and licensing of cable and satellite television, were enacted to establish a

Competition’s Effects on Programming Diversity

healthy market. Some regulations successfully fulfilled their goals whereas others fostered concentration in the market (Park, 2002). The overall effect of these new policies, however, was to increase competition among broadcasters. In 1991, a private broadcaster was granted a license for the first time, introducing direct competition into the broadcast market. Seoul Broadcasting System (SBS) was licensed as a local broadcaster in the Seoul metropolitan area. Seoul is the largest city in Korea. Approximately one third of the national population is concentrated there, as are the economic and political systems. SBS’s start-up in Seoul put it in a strong position to become a national broadcaster. Now SBS has eight affiliated local broadcast stations that cover most of Korea. The introduction of SBS opened up the broadcast market to the private sector and introduced direct competition. The incumbent Korea Broadcast System (KBS) and Munhwa Broadcasting Company (MBC) are both “public” broadcasters. Cable television was launched in March 1995, the Korean government having granted licenses to 52 system operators. As with other subscription-based media, cable television was not an immediate threat to terrestrial broadcasters because it takes time to establish a viewership. However, even distant threats can trigger competitive behavior in incumbent broadcasters. Direct broadcast satellite service, Skylife, was introduced in March 2002. The Korean government, however, strictly regulates revenues and profits in the terrestrial broadcast market. Broadcasters’ ad rates are set by the Korea Broadcast Advertising Corporation (KOBACO), which also has the exclusive rights to sell broadcasters’ advertising time. Both broadcasters’ saleable air time and the total time of programming are regulated by the Korea Broadcast Commission (KBC). Although broadcasters compete for viewer ratings, ratings are not directly tied to their revenues. This unique market structure may affect the competitive or noncompetitive behavior of the broadcasters. MBC and SBS are advertiser-supported broadcasters. KBS runs two national channels. Although it is publicly owned and supported by license fees in addition to advertising, KBS is highly dependent on ad revenues. As with most other countries, Korean broadcasters have a public interest obligation. The Broadcast Act of 2000 has several rules to ensure this policy goal, including a quota for certain program types. According to the Broadcast Law, broadcasters must devote specified amounts of time to news, cultural programs, and entertainment. The proportion is set by KBC each year. The decree says that at least 30% of a broadcaster’s airtime must be devoted to cultural programs, and entertainment programs must not exceed 50%. Programs that cultivate the cultural tastes of citizens or educate children and young people are considered cultural programs. Korean broadcasting

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legislation also specifies that program types should not be concentrated during prime time. This regulatory and market environment, and especially the advertising rate regulation, limits competition in the broadcast industry. “Competition” in the Korean market may not be identical to competition in other free market countries. Also, scheduling decisions are affected by the quota regulating the proportion of programs belonging to a specific genre that must be shown directly. These quotas in turn affect the characteristics of certain genres. For instance, programs classified as “informational and cultural” often place a strong emphasis on “entertainment.” Regulators classify programs according to the department that creates them. To fulfill the quota requirements, broadcasters produce information programs that often strongly resemble entertainment shows, resulting in the “entertainmentizing” of information. Korean regulations thus seem to encourage experimentation in the information genres, as programmers try out new formats and ideas to attract audiences to informational programs. Taking these unique characteristics of the Korean broadcast market into account is important when looking at competition’s effects on Korean broadcasters’ programming strategies.

Research Questions and Method The relation between the degree of market competition and the competitive strategies of broadcasters is the main focus of this study. Does competition increase competitive behavior and eventually affect programming? What competitive behaviors do broadcasters adopt when competition increases? Does competitive behavior differ depending on program type? Early studies on diversity focused on content diversity. This focus had to do with the rapid influx of new channels into the marketplace. However, these types of diversity studies have definite limitations. Broad program categories may not reflect subtle differences between the programs broadcasters provide. Many genres comprise a range of program types that appeal to different audiences. In this study, I attempt to (a) incorporate access or reflective diversity into the program type measures, and (b) compare how competition affects different types of programs differently.

Research Questions Discrepancies and contradictory results in previous diversity studies partly reflect differences in the methods used to take measurements. The most popular method of measuring diversity is to compare the scheduled time of each

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program type. There are usually 10 to 20 different program types or “genres,” such as drama, comedy, nonfiction, and so forth. Genre is a useful way of considering diversity because people select programs according to type. However, genre is not a rigid concept that can be applied in clear and uniform ways. Program types evolve as viewer tastes change and new genres can emerge from old ones. Broadcasters sometimes respond to competition by replicating a competitor’s program type or by differentiating their own product. Differentiating one’s program type could mean creating an entirely new genre; more often, however, it entails slight adjustments within a genre likely to attract a different segment of the market. Drama is one of the most popular genres and has the highest average ratings. It also has the highest budgets (MBC, 2003). Informational and cultural programs, on the other hand, are specifically aimed at promoting diversity as specified by the Broadcast Act of 2000. According to the Broadcast Act of 2000, terrestrial broadcasters must allot at least 30% of their time to information and cultural programs. Less than 50% of their time can go to entertainment programs, including dramas. This law was enacted to keep the broadcasters from becoming overly commercialized. Broadcasters are hypothesized to use different programming strategies for different program types. Competition will affect programs aimed at achieving high ratings and programs scheduled to comply with the “diversity” policy differently. Previous research on competition’s effects suggests that when competition levels are high, products are more likely to be homogenized (Van der Wurff, 2004). To identify the patterns of broadcasters’ different strategic responses to different competitive situations, two research questions were set up: RQ1. Does competition affect the diversity of informational and cultural programs and dramas differently? RQ2. What is the effect of competition on informational and cultural program diversity and drama diversity? I use the concept of “informational and cultural programs” to signify programs aimed at disseminating information or programs that aim to enhance the public’s cultural sophistication. Regulators classify such programs as “cultural programs” as opposed to “entertainment programs” and “news and nonfiction programs.” Because there is considerable overlap between nonfiction and cultural programs, I have included all nonfiction programs in the category of cultural programs. Two different methods are used to gauge competition. One is a longitudinal measure that assesses changes in competition levels across time. The other measure is cross-sectional and uses specific time slots that indicate the

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degree of competition among broadcasters. Prime time is the most competitive time slot. It is expected that prime time shows will be more sensitive to changes in the market environment than shows airing in other time slots.

Method and Data Dataset. For Korea’s three major broadcast networks, a content analysis of a week’s programming schedule was conducted for each year between 1989 and 2002. For each year, the weekly broadcast schedule for the spring season was collected. Korean broadcasters start a new season in the spring and fall. When the spring schedule was not available, the fall schedule was substituted.2 The schedules were obtained from several sources: the annual or year-end report of each broadcaster, TNS Media Korea Ratings Report, and private sources provided by Dr. Hyunjoo Kim.3 Programs that lasted more than 5 min were included in the data set. A total of 8,900 programs were listed and of these, 28 programs were excluded from analysis due to the ambiguity of program type. A total of 8,872 programs were included in the data set. The program list was coded during January and March 2003. Four coders participated in the coding task and the intercoder reliability measure was 0.9. The intercoder reliability was calculated by selecting 10% of the cases, which is a total of 880. With the 880 cases, the intercoder reliability was tested.4 Program type classification. There has been a considerable amount of debate about how we should categorize TV programs. Einstein (2004) used 22 categories, exceeding the number usually used by broadcasters and researchers, and developed more detailed subcategories for dramas, because drama is a dominant genre and has changed considerably during the past few decades. In Korea, there have also been significant changes in cultural and other entertainment programs. I have used subcategories for each genre, so that my typology reflects changes within each program type that are often overlooked in the broad program classifications used by many scholars. Programs were sorted into one of 15 different genres—drama, sitcom, animation or cartoon, children’s, sports, music, entertainment, news, current affairs, informational and cultural, education, documentaries, infotainment, movies, and games. The “informational and cultural” category comprises cultural programs, educational programs, documentaries, and infotainment shows. Detailed subcategories were specified for each genre, so that the number of subcategories totals 148. For the informational and cultural programs, 32 subcategories were used. Cultural programs were divided into 20 subcategories (politics; economics and industry;

Competition’s Effects on Programming Diversity

social issues; life; information and communication; environment and nature; science; campaign and public relations; culture and art; hobby, leisure, and travel; sports; health; history; media; charity; live or recorded performance; religion; TV column; ombudsman; and mixed format), educational programs into 4 subcategories (general language, general culture, occupational training, school-related), documentaries into 6 subcategories (nature, life and human, history, culture, science, other), and infotainment into 2 subcategories (quiz format, panel format). These subcategories were designed to reflect both viewer preferences and program formats. Drama was divided into 18 subcategories: home drama, melodrama, history and traditional, contemporary history, science fiction and fantasy, horror, action, mystery and thriller, musical, nonfiction, young generation, rural, medical, politics, school, human, social issues, and juridical. Only the cultural and information programs and dramas were used in this analysis.

Variables Independent variable: Competition. Several indirect measures were used to gauge competition levels because it is hard to find an adequate single measure. The first measure I used is the penetration of multichannel services providing alternative programming. In Korea, cable television was licensed in 1995 and direct satellite service in 2002. Because this study covers the years 1989 to 2002, only the cable penetration rate was included in the analysis. Second, the number of commercial broadcasters that entered the market during the years under analysis was included as a measure of competition. Most of these broadcasters were local channels affiliated with the major commercial broadcaster SBS. Their advent expanded the market for SBS programs and advertisers, thereby increasing competition for the incumbent national broadcasters. The third measure of competition was the share of advertising revenue received by terrestrial broadcasters. This measure compares the revenue received by traditional broadcasters with that received by all other media, including cable, the Internet, newspapers, and so forth. This measure shows that the advertising market is competitive overall. However, it may not reflect the relative competitiveness among broadcasters due to the new multichannel services such as cable and satellite. Another measure was used to compare the competitiveness of the traditional broadcasters. The advertising revenue share of the terrestrial broadcasters was compared to the revenues of terrestrial, cable, and radio. The higher the result, the less there is competition. In this study, I do not compare the intensity of competition in the same manner as Van der Wurff (2004). In the

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Netherlands, the threshold for the number of channels that decreases diversity was six. In free market environments like the Netherlands, the number of channels exerts a strong influence on the amount media firms are willing to spend on programming. The Korean television market, however, is unique in that the costs of programming are relatively fixed regardless of competition due to the rate regulation of TV advertising. I have used the different time slots to measure differences in the degree of competition.

share of each player in each category are considered (McDonald & Dimmick, 2003). I measure content diversity using genres’ subcategories. To compare diversity measures between different time periods and different time slots, I adapted the Hirschmann-Herfindahl Index (HHI), a standard measure for market concentration. Because the highest score of HHI is 10,000, a subtraction of HHI from 10,000 divided by 10,000 was used as the diversity score. Diversity Index : (10000-HHI)/10000

Dependent variable: Diversity index. This study developed a detailed program type classification method. Studies on program diversity usually measure program type based on standard generic classifications—drama, comedy, news, and so forth. This study’s measure, although efficient, does not reflect differences over long periods of time. For instance, dramas in the 1970s differ somewhat in format, content, and target audience from dramas in the 1990s. Some drama formats resemble each other, but there are also new formats that have developed over time. Even in the same era, some dramas target different audiences. Thus, TV program genre is not a fixed category, but reflects viewers’ taste and cultural nuances. In this study, I adopt a new method of classifying program types. I subdivided each of the basic, universal program type categories into more detailed categories that reflect both target audiences and program format. To measure the degree of diversity, I used a diversity index analogous to Simpson’s D used by McDonald and Lin (2004), where both the number of categories and the

Figure 2.

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where HHI is the sum of squares of the shares of program subcategory measured in total minutes provided in the week of analysis.

Results General and Prime Time Genre Diversity Index by Year For the years 1989 to 2002, all programs longer than 5 min were included in the analysis. All terrestrial national broadcasters were included in the analysis. The overall diversity of all programs declined slightly during the 14 years of analysis. This result includes all types of programs and holds whether diversity is measured according to standard categories or the detailed subcategories developed in this study (see Figure 2). The general diversity index decreased from 0.866 in 1989 to 0.854 in 2002. This is only a slight decrease. The

Genre diversity by year (15 program types in general genre, 147 program types in subcategory).

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Figure 3.

Genre diversity by year on prime time.

subcategory diversity change was also minimal. It fell from 0.955 in 1989 to 0.938 in 2002. In the years 1992, 1998, and 1999, both diversity indexes increased. When we compare prime time, where competition is fiercer, the decline in diversity is still small, but it is greater than when we include all programming time slots. This suggests that the competition level is negatively related to program diversity (see Figure 3).

Detailed Genre Classification and Its Diversity To see if the diversity of different program types was affected differently, a comparison between informational and cultural programs and dramas was made. The number of informational and cultural programs increased over the 14-year sample period because programming hours increased. Thus the total number of programs increased. The number of such programs aired approximately matches the 30% quota for cultural programs. However, the number of different kinds of informational and cultural programs did not increase. In 1989, there were 21 subtypes of informational and cultural programs and 22 in 2002. There were some fluctuations during the sample period but overall there was no increase. Only 17 types of informational and cultural programs were provided in 1995, 1997, and 1998. It is important to note that the subtypes offered differed from year to year, but the average number of subtypes did not vary. We can also say that the number of programs provided increased due to the increase in programming time, but that the diversity of cultural programs did not.

Competition’s Effects on Programming Diversity

This same trend is found in the drama category. A total of 51 dramas were broadcast in the year 1989, whereas in 2002, 95 dramas were on the weekly schedule. However, there were 11 types of dramas in 1989, but only 10 in 2002. Among the 18 subtypes of dramas offered during the 14 years of analysis, only about half of them are provided in any given year and the types of dramas changed over time (see Table 1). Because the government’s programming quota effectively decides how many broadcast hours are devoted to informational and cultural programs, it is difficult to tell whether diversity has increased using only the broad category of program type. By this standard, diversity should not change regardless of the market situation. However, it may be that the quota regulation has little to do with actual programming strategy. To find out whether competitive programming strategies have effected the broadcasting of informational and cultural programming during the past decade, an analysis of the diversity index of my detailed genre classification was conducted. The results show that the diversity index of informational and cultural programs dropped systematically. In 1989, it was 0.86, but in 2002, it dropped to 0.75. There were many points of fluctuation during these years. There were dramatic decreases in the years 1993, 1995, 1997, and 2000 (see Figure 4). If we compare these findings with those yielded by an analysis of all drama programs, the most typical of entertainment programs, the overall diversity pattern is similar. The diversity index also decreases in the case of dramas. However, there is more fluctuation in the

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Table 1.

Total Number and Number of Subcategories by Year

Informational and Cultural

Drama

No. of Subcategories Provided

Total No. of Programs

No. of Subcategories

Total No. of Programs

21 22 20 22 18 20 17 22 18 17 17 19 20 22

155 152 189 203 142 191 127 206 204 147 188 182 203 243

11 9 12 10 12 14 13 10 11 13 9 11 12 10

51 51 75 68 77 74 76 90 90 92 79 92 80 95

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

informational and cultural program category over the years. Because of the programming restrictions on national broadcasters, the percentages of informational and cultural programs do not fluctuate during the years of analysis. The proportion of such programs aired consistently falls between 25% and 31%. However, there was a difference in prime time. When new commercial entrants in-

Figure 4.

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troduce direct competition into the market, prime time informational and cultural programming hours decrease sharply (from 585 min in 1991 to 240 min in 1992). Also, “infotainment” programs are programmed during prime time rather than more traditional information programs. Infotainment programs are programs with an informational and cultural bent but that incorporate entertaining elements like quizzes, comedy, and drama. These new for-

Diversity index of informational and cultural and drama programs subcategories.

S. Park

Table 2.

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Average

Proportion of Entertainment-Oriented Information Shows

All Info (%)

Infotainment (%)

Infotainment on Prime Time

Prime Time Info Programs

Infotainment Prime Time Minutes

31.4 29.8 29.8 30.4 27.3 29.6 26.3 29.1 25.7 23.0 27.9 25.3 29.3 31.2 28.3

5.0 4.4 7.2 5.8 4.9 4.3 5.5 4.2 3.4 3.7 3.8 5.6 6.4 4.7 4.9

0.0 0.0 0.0 22.9 0.0 0.0 0.0 0.0 0.0 12.1 0.0 0.0 0.0 14.5 3.5

240 135 585 240 370 385 475 290 265 455 320 456 591 368 369.6

0 0 0 55 0 0 0 0 0 55 0 0 0 54 11.7

mats have developed over years. Sometimes they are referred to as “edutainment” programs by broadcasters. Infotainment shows, although classified as informational and cultural programs, in fact, compete with other entertainment genre programs. An increased ratings pressure created by competition may be responsible for the incorporation of entertaining elements into informational programs. But because broadcasters are bound by the programming quota, new hybrid shows evolved from traditional informational and cultural shows. The competitive pressure of prime time may mean that a different pattern of programming strategies emerges. Because regulation dictates that program types should

Figure 5.

not be concentrated during prime time, the tendency toward concentration will not be maximized. However, there will be incentives to imitate competing channels, which may result in more concentration during peak times (see Table 2 and Figure 5). A pattern contrary to my predictions emerged in the analysis of prime time diversity. During prime time, the diversity of informational and cultural programs increased. The 1989 diversity index for informational and cultural programs of 0.63 increased to 0.78 in 2002. The drama genre showed precisely the reverse trend. The drama diversity index in 1989 was 0.82 and decreased to 0.65 in 2002. Assuming that overall competition increased over the years, we can say dramas are more sensi-

Diversity index of informational and cultural programs and dramas on prime time.

Competition’s Effects on Programming Diversity

49

tive to competition and information programs are less affected by it. We should be cautious, however, when interpreting the results of increased diversity for informational and cultural programs aired during prime time. It may be that increased diversity is a strategic response to increased competition. Terrestrial broadcasters, bound by public interest obligations, may have discovered that their image is enhanced by the production of quality programs. Informational and cultural programs are often evaluated by their quality rather than the ratings they generate. So success for informational and cultural programs may differ from that of an entertainment program. Thus, when competition increases, entertainment programs will try to obtain higher ratings, but informational and cultural programs will seek better reviews from viewers and industry observers. This may account for the increased diversity observed in prime time, where competition is more intense. However, further investigation is necessary to verify this claim.

Correlation of Diversity and Competition Next I analyzed the correlation between the degree of competition and the diversity index of dramas and informational and cultural programs. Correlation analysis between the diversity measures and competition level shows that when there is more competition, the diversity index generally decreases. This result is consistent, regardless of the competition measures used. Competition was measured in several ways to reflect the diverse range of changes that is occurring in the broadcast market. First, cable penetration rate of each year was used. The increased cable penetration is hypothe-

Table 3.

sized to introduce competition in the advertising market as well as the viewer market. The number of private terrestrial broadcasters was another measure. By policy, nine new entrants were licensed during the period of study. The revenue share of television advertising in regard to all ad revenues was also used. The ad revenue share of television compared to other media is on the rise, so even if competition increases within the broadcast sector, because the total market is expanding, the competition may seem to have a smaller effect. The last measure was the revenue share of terrestrial TV ad revenues out of total TV revenues, including only the terrestrial, radio, and cable revenues. The most significant correlation was between the number of private broadcasters and the diversity index. The increase in the number of private broadcasters was negatively correlated with the diversity index. The Pearson r was –.731 and was significant at p < .05 for information and cultural programs’ diversity. For dramas, the correlation coefficient was –0.844, also significant at p < .05. During prime time, the correlation was positive but not significant for informational and cultural programs. But for prime time dramas, there was a negative and significant correlation. This result is consistent with the previous analysis of prime time informational and cultural programs. The variety of cultural programs seems to increase when competition level increases (see Table 3). This result may be related to Van der Wurff and Van Cuilenburg’s (2001) observations on ruinous and moderate competition’s different effects on diversity measures. During prime time, dramas compete with each other vigorously, because drama ratings are an important indicator of a channel’s overall performance. Drama ratings are

Correlation Between Diversity and Competition Measures Cable Penetration

Informational and cultural programs r Sig. N Drama r Sig. N Prime time informational and cultural programs r Sig. N Prime time dramas r Sig. N

No. of Private Broadcasters

Revenue Share of TV Ad (All Media Ad Revenue)

Revenue Share of TV Ad (TV, Radio, Cable)

–0.502 0.067 14

–.731** 0.003 14

–0.286 0.322 14

–0.518 0.058 14

–0.528 0.052 14

–.844** 0 14

–0.375 0.186 14

–0.443 0.113 14

0.334 0.244 14

0.519 0.057 14

0.448 0.108 14

.538* 0.047 14

–0.453 0.104 14

–.687** 0.007 14

–0.279 0.334 14

–0.443 0.113 14

*Correlation is significant at the 0.05 level (two-tailed). **Correlation is significant at the 0.01 level (two-tailed).

50

S. Park

also important because they effect news ratings, because the news usually airs immediately after the daily dramas at 9 p.m.5 Dramas are scheduled at the same time to compete directly for viewers, whereas for informational and cultural programs, there is less direct competition created by scheduling. Thus, there may be more robust competition during prime time for dramas than for information and cultural programs. Contrary to the hypothesis that cable penetration would affect broadcasters’ competitive behavior, there was no statistically significant relation between these two measures. Cable penetration is a good indicator of how the TV market is expanding and developing. However, it may not be an appropriate measure for gauging the level of competition between terrestrial broadcasters, because top-ranking cable channels are often major broadcasters’ rerun channels. The rerun channels usually broadcast the previous day’s popular shows, including dramas. So the increase in cable penetration expands audiences for the major broadcasters. It will also create competition because some cable channels have no affiliation with major broadcasters. Thus, cable penetration produces two countervailing forces on the competition between broadcasters. However, the direction of competition’s impact on diversity was consistent with the relation between the number of private broadcasters and the diversity index. With the exception of prime time informational and cultural programs, diversity decreased with competition. This result held true for the other two measures of competition: terrestrial broadcasters’ share of all advertising revenues and the ratio of their share of ad revenue to that of all TV and radio broadcasters. The correlation between the prime time informational and cultural program diversity index and the revenue share of terrestrial broadcasters, compared to ad revenues for all TV and radio broadcasters, was statistically significant. This means that increased competition also increased the diversity of informational and cultural programs during prime time. It appears that broadcasters engage in differentiation strategies for informational and cultural programs than they do for dramas, which they tend to homogenize. Evidence from the analysis of different time slots suggests that there may be two reasons for this. First, scheduling practices for dramas and informational programs are quite different. Dramas face more direct competition. Second, the measure for these two genres is essentially different, which means they have different goals. Informational and cultural programs are often produced not to attract the largest possible audience, but to respond to the public interest goals laid out for broadcasters in the Broadcast Act of 2000. Rather than competing for audiences with

Competition’s Effects on Programming Diversity

the same product, broadcasters are more likely to differentiate. This result is consistent with Van der Wurff and Van Cuilenburg’s (2001) observations about ruinous versus moderate competition. Broadcasters adopt different programming strategies depending on the degree and type of competition.

Discussion In this study, I attempt to determine whether competition affects different types of programs differently. For the analysis of diversity within program types, a new measure of program genre was adopted. Each broad category program genre was divided into subcategories that reflect both a program’s target audience and its format. As was the case for broader category diversity, analysis shows that overall diversity within these genres declines slightly over the years as competition steadily increases. When a competitor enters the market, there is generally a drop in diversity both for informational and cultural programs and for dramas. Thus, we can say that competition exerts a negative effect on diversity. During prime time, however, competition had opposite effects on the diversity of these two types of programs. Both program types’ diversity decreased during the period analyzed, but there was more fluctuation for informational and cultural programs because this genre allows for more experimentation than relatively standardized genres like drama. Another important difference is that in prime time, the trend moved in opposite directions for the two program types. Informational and cultural programs’ diversity during prime time increased over the years; however, the diversity of dramas decreased in prime time, as it did in other time slots. These contradictory results call for further investigation. For now we may cautiously conclude that evaluation standards for entertainment and informational programs differ. Future studies may investigate how scheduling practices affect the degree of competition. It would be interesting to look at different time segments throughout the day to see if there are any differences between time blocks. For instance, in the morning, where information magazine shows are all programmed to air simultaneously, there may be replication and homogenization among the programs, whereas other time slots may allow for more differentiation. This study shows that informational and cultural programs respond to competition by differentiating, whereas dramas respond by homogenizing. This difference reflects the different strategies broadcasters adopt for different program types. We can infer from these results that there are fluctuations within other genres that have not been recognized

51

by previous studies because they use a more general genre typology. It may be that in other countries, competition has had a homogenizing effect on dramas and other entertainment programs, but has given rise to differentiation strategies for other program categories. If this is the case, these divergent trends would cancel each other out in the measurement of overall diversity. This possibility calls for further investigation supported by more elaborate data. This study’s primary shortcoming is the unique character of the Korean market, which has both programming quotas and advertising rate regulations. We must be cautious in generalizing these results and applying them to a broader market. However, the analysis of genre subcategories may well be applied to other cases and markets. Doing so would make possible further generalizations about the relation between market forces and media content.

Sora Park ([email protected]) is Assistant Professor at the School of Communication Arts, Kwangwoon University, Seoul, Korea. Her research interests include media markets, competition, and media policy.

Acknowledgments This research has been conducted by the Research Grant of Kwangwoon University in 2003.

Endnotes 1. Although not inclusive of all studies, for example, the Journal of Media Economics recently published a special issue on diversity (see Volume 17, Issue 2, 2004). 2. All three broadcasters publish a yearbook and some of them list the spring and fall season schedules. Spring season usually starts in April and fall season starts in September, but this fluctuates from year to year. However, broadcasters report their new schedule at the beginning of the season and most of these reported schedules are included in the yearbook. 3. Dr. Hyunjoo Kim at Kwangwoon University was generous enough to provide his personal collection of the spring and fall season schedules for the years 1986 to 1997. 2M 4. Intercoder reliability = (N1 + N2 ) M is the number of cases on which the coders agreed; N is the number of cases coded by each coder. 5. The daily dramas of two major networks compete in the 8:30 p.m. time slot, right before the news begins at 9. Drama ratings often influence the ratings of main news. Also, most

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miniseries dramas are scheduled to air simultaneously, usually at 10 p.m. on weekdays, which pits the broadcasters in direct, back-to-back competition. The intensity of this competitive situation may make broadcasters’ competitive behavior for dramas different from their behavior for other program types.

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