the emerging broadband television market in the united states

Assessing the strategic differences between cable television and telephone firms

Sylvia ChanOlmsted
and
JaeWon Kang
University of Florida

Introduction

The broadband industry is frequently touted as an essential building block of future digital entertainment as its platform enables the fast delivery of digital videos with the personalization and ondemand nature of the Internet (Bratches and Rooney 2001). Specifically, broadband systems enhance traditional television with richer graphics, links to Web sites through television crossover links, electronic mail, and chat room activity and online commerce through a back channel (Tcommerce). As the two leading broadband service providers, digital subscriber lines (DSL) and cable modem, continue to expand in this emerging market, we are witnessing a new phase of development for the television medium. Just as the introduction of cable 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 cable 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.