The broadcasting in the internet age

Electronic copy available at: http://ssrn.com/abstract=2740432
1
BROADCASTING IN THE INTERNET AGE:
SURVIVAL OF THE FITTEST?
KATHARINA HOELCK1
and PIETER BALLON2
1,2
iMinds - Digital Society, SMIT - Studies on Media, Information & Telecommunication,
Vrije Universiteit Brussel, Belgium
Correspondence: Katharina Hoelck, iMinds-SMIT, Vrije Universiteit Brussel, Pleinlaan 9,
1050 Brussel, Belgium. E-mail: Katharina.Hoelck@vub.ac.be
Abstract:
Digitization and a range of accompanying innovations enabled over-the-top (OTT)
platform companies such as Netflix, Apple or Google to enter the broadcasting sector. As a
response, the traditional incumbent broadcasters and distributors built their own digital
platforms. Platforms started to dominate different stages of the value chain – the industry
became subject to the phenomenon of ‘platformization’. An ecosystem with a unique
structure and competitive dynamics driven by the diverging business logic of platform
companies emerged. This platformized broadcasting industry can hardly be captured by
current approaches in the field of media and platform economics. Thus, the paper uses the
theoretical framework of Platform Networks (PN), which extends existing platform theory.
In an in-depth case study, the framework is applied to explain the changing structure and
competitive dynamics of the digital broadcasting industry in Belgium. As a result, the paper
argues that broadcaster, distributors and new entrants need to carefully balance
competition and cooperation in order to create a sustainable digital ecosystem.
Key words: Platforms, two-sided markets, broadcasting, platform competition, Netflix,
Apple, Google
Electronic copy available at: https://ssrn.com/abstract=2740432

Electronic copy available at: http://ssrn.com/abstract=2740432
BROADCASTING IN THE INTERNET AGE
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1. Introduction
Since the beginning of the 21st century, a number of trends associated with
digitization have fundamentally changed the media industry. New media company giants
such as Amazon, Netflix, Apple or Google have entered the market, blurring the boundaries
between sectors. This has led to a reconfiguration of both the value network and revenue
flows in the sector and in turn to uncertainty, conflicts and strategic shifts in the ecosystem.
Unlike the old media conglomerates of the past such as Time Warner, the newly entering
and extremely powerful companies are set up as over-the-top (OTT) platform businesses.
Platform companies create value by mediating between two or more groups of users on the
different sides of a two- or multi-sided market (see e.g. Rochet & Tirole, 2003; 2006;
Evans & Schmalensee, 2010).
In an attempt to survive in this new digital media world, incumbents have adapted
to the competitive situation by striving for a platform status as well. Complex ecosystems
emerged in which platforms operate on top and next to each other.
This tendency can also be observed in the broadcasting industry, where broadcasters
have traditionally occupied the place of central platforms positioned in-between customers
and advertisers. Concretely, in Belgium, digitization did not only enable OTT platforms to
enter the home market of broadcasters and distributors, but also empowered established TV
distributors to start playing a two-sided platform role themselves between 3rd party service
providers, consumers and increasingly also advertisers. 1
The digitization of the industry led
to a shift in the production, distribution and consumption of media content. The model in
which content was linked to a single platform and specific revenue stream no longer stood.
1
In Belgium, the political and the cultural landscape are separated along language barriers. Also the media sector is
divided into a French-speaking and Dutch or rather Flemish speaking landscape. Therefore, there is not one general
Belgian media sector, but the media landscapes have to be assessed separately. We focus in the following on the Flemish
broadcasting industry.

3
Platforms started to dominate on multiple layers of the value chain and power structures
were alternated.
In this context, the paper aspires to gain new and fresh insights concerning the
question: How does the platformization of the broadcasting industry affect companies’
interactions and incentives?
The paper aims to take stock of the structural changes in the digital broadcasting
industry and to explain the competitive dynamics and strategic actions taking place in the
industry’s platformized ecosystem using the example of the Belgian market. Since existing
platform theory reaches its limits when covering layered platformization, we discuss those
layered platform ecosystems under the label of Platform Networks (PNs) (see also Hoelck,
Bleyen & Ballon, 2013). We argue that many of today’s power struggles e.g. about roles
and revenue streams between distributors, broadcasters and new entrants in the audiovisual
industry can be explained by the counter-logics of PNs in terms of competition vs. the
creation of sustainable ecosystems.
The scientific relevance of the topic is evident in the increasing amount of research
conducted in the field. However, although researchers such as Jean Tirole, co-inventor of
the area of platform economics and winner of the Nobel prize in economics in 2014, have
captured the set-up and strategies of platforms in econometric models, the interplay of
platforms in the media and communications system and the larger implications of the rise
of the new media behemoths require further exploration. Indeed, existing research about
platforms in the media and communication sector is mainly concerned with the advertising
based cross-subsidization of the different market-sides or focuses on optimizing platform’s
marketing or business operations (e.g. Evens, 2010; Gomes & Pavan, 2013). It goes
without saying that in a society more and more dominated by platform mediated market

4
structures the implications of this strand of research have direct impact on, and importance
for, the day-to-day business of firms in digital industries.
The remainder of the paper is structured as follows. First, the paper describes the
state of the art of the field of platform theory. In a next step, we introduce our PN
framework, consisting of the PN Model and PN Matrix. The concept accommodates the
fact that platforms are not isolated entities but rather embedded in a multiple layered
ecosystem of further platforms shaped by several competitive dynamics, which are
determining a platform’s competitive strategy. Subsequently, the research design of the
following empirical part is explained. The empirical part consists of a case study of the
Flemish-speaking Belgian broadcasting industry relying on qualitative and quantitative
evidence. Within the case study, the PN framework (Model and Matrix) is used as a
theoretical tool. Afterwards, the findings of the case study are discussed. Finally, a
conclusion is drawn and an outlook is given.
2. Theoretical Background
2.1 Platforms
In the past decade the field of ‘platform theory’ emerged, which describes the
characteristics, strategies and impact of platforms.
To begin with, neither platforms nor two-sided markets are new occurrences per se.
Platforms have existed throughout economic history, but have simply not been exposed and
scrutinized as such in the past. The stock exchange or telephone networks are in fact
classical examples for one-sided platforms, while bazaars or shopping malls are typical
two-sided markets. Yet, two-sided platform companies relying on the Internet as major
infrastructure have proliferated in the information economy, which led to an increased
research effort.

5
Indeed, in the past years, the concept of platforms has received significant attention
in design, economics and strategic management literature under the labels: ‘platform
markets’, ‘two-sided networks’ or ‘two-sided markets’. Two-sided network or market
theory formalizes the particularities of ‘platform markets’ and can thus be regarded as an
extension and formalization of earlier literature on network externalities, compatibility and
‘vertically related’ markets (see e. g. Economides & White, 1994; David, 1985; Farrell &
Saloner, 1985; Katz & Shapiro, 1985). Much of the earlier literature offers a rather ‘static’
analysis in the sense that it concentrates on price equilibrium and allocative efficiency,
while in later work researchers started to conduct more ‘dynamic’ analyses that focus on
two-sided platform strategies and business models, the evolution of platform boundaries,
and inter-platform interactions (see e. g. Armstrong, 2006; Ballon, 2009; Eisenmann et al.,
2009; Hagiu, 2009). In the meantime, platform theory is a well-developed and well-
accepted part of Industrial Organization (IO) literature and scholars have attempted to
formalize the particularities of platforms (see e.g. Evans & Schmalensee, 2010; Filistrucchi,
Geradin, van Damme, & Affeldt, 2014; Hagiu, 2014).
Most of today’s two-sided network literature refers to platforms as mediating
entities between agents that operate on different sides of the market, and whose utility is
affected by participation and usage on the opposite side(s). Thus, platforms and their
providers create value by mediating and coordinating between two or more stakeholders
(Rochet & Tirole, 2006). In the new digital media world, the term ‘two-sided platform’ can
be used to refer to services like online retailers (mediation between sellers and consumers,
e.g. Amazon Inc.), technologies such as operating systems (mediation among application
developers and users, e. g. Apple Inc.’s iOS), or products like credit cards (mediation
between merchants and consumers, e. g. VISA) (Hagiu, 2014). In addition, the markets in
which the intermediaries occur cannot be only two- but also multi-sided (Ballon, Bleyen,

6
Donders, & Lindmark, 2012; Evans, 2003). The web-based professional network platform
LinkedIn for example, is mediating between three market sides: users, recruiters and
advertisers.
The defining feature of platform markets is cross-sided network effects, also
sometimes referred to as two-sided network effects (Rysman, 2009). Cross-sided network
effects as introduced by Rochet & Tirole (2003) occur if an increased usage on one market
side creates benefits for the distinct user group on the other side of the market (see also Le
& Tarafda, 2010). For example, the more sellers offer their products on eBay, the more
interesting the platform becomes for buyers and vice versa.
Cross-sided network effects in turn lead to some other well-known characteristics of
platform markets: the ‘chicken-and-egg’ problem (high entry barriers) and the ‘winner-
takes-it-all’ dynamic (monopolization tendencies). The ‘chicken-and-egg’ problem makes it
very difficult to start a platform company; a critical mass of participants on one market side
has to be attained to attract participants on the other side and vice versa (Hagiu, 2007). Yet,
once an installment base has been procured, it is almost impossible to stop a successful
platform, termed the ‘winner-takes-it-all’ dynamic (Eisenmann et al., 2006). In digital
media markets, these characteristics are usually accompanied and enforced by a range of
other effects such as supply-side economies of scale, first-mover advantages, the
bandwagon effect, user lock-in and switching costs (Bresnahan, 1999; Gottinger, 2003;
Farrell & Klemperer; 2007).
Furthermore, platforms have a unique pricing structure, which enables them to
maximize profits while undermining competitors’ pricing. They can ‘cross-subsidize’ one
market side by charging prices at one side below marginal cost (in some cases even
negative), and derive profit on the other side(s) of the market. A platform can therefore

7
attract new participants on the subsidized side of the market to foster participation on the
profit-making side to increase revenues (Evans & Schmalensee, 2007).
Altogether, these characteristics and effects enable platform companies to gain
massive market power while reducing competition, which gives them a competitive edge
over merchant companies. Yet, while platform theory is able to cover platforms as single
entities, it reaches its limits when describing complex ecosystems in which platforms
operate on top and next to each other and compete and cooperate with multiple other
platforms. Thus, the following section will introduce the concept of PNs in order to address
platforms in the context of ecosystems.
2.2 Platform Ecosystems
While the body of literature on two- and especially multi-sided platforms is still in
development, the economics of traditional merchant firms can be regarded as extensively
studied.
One of its most fundamental insights is that traditional industries are increasingly
organized in an ecosystem of firms, especially in the information, media and
communications industries. Thus, drawing on the theoretical framework of Baldwin and
Woodard (2007) on Modular Clusters (MCs), the concept of Platform Networks (PNs) can
be used to describe more complex multi-layered media platform ecosystems and the
competitive dynamics within them. Within PNs, firms can compete horizontally (inter-
layer) and vertically (intra-layer), but also diagonally (cross-layer) (see Hoelck et al., 2013
for a further detailed discussion).
The PN Model illustrates the market structure of platformized ecosystems (see
Figure 1 for an example of an ecosystem with three layer). The platforms companies in the
same horizontal layer offer substitutes, while the platforms in the adjacent vertical layers
offer complements, thus representing the different sides of the market.

8
Figure 1. The PN Model.
Since the economic logic of two- and multi-sided media platforms differs
fundamentally from the logic of traditional merchant industries, PNs differ significantly
from MCs. First, platform networks are denser than MCs. Due to highly increasing supply
side economies of scale, cross-sided network effects and the resulting ‘winner-takes-it-all’
‘chicken-and-egg’ effect, the ecosystem’s layers are usually served by a single monopoly
platform or a few large fiercely competing platforms in each layer. Second, although being
denser, the ecosystem is becoming far more complex, since two-sided platforms have a
triangular structure and can even be multi-sided. Thus, there are multiple points of business
connections with varying directions in platform ecosystems making them no loose and
simple company clusters but rather complex networks in which the different platform layers
also start interacting with each other. Third, the ecosystem’s inherent economic logic
differs. Network effects change the nature of competition in an ecosystem (Tremblay,
2011). Companies usually compete in terms of price and product quality. Yet, platforms
can pursue pricing strategies not feasible for merchant companies such as cross-
subsidization by exploiting cross-sided network effects. Also, first-mover advantage,
Vertical Layer
Platform Platform
Horizontal Layer
Platform Platform
Platform Platform
Platform
Platform
Platform
Horizontal Dynamics
Vertical
Dynamics
D
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g
o
n
a
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D
y
n
a
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i
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s

9
bandwagon effects, and lock-in tendencies favor big successful platform companies
entering the market at an early stage regardless of the quality of their product (Doyle,
2013).
The distinct structure of platformized ecosystems affects also the competitive
dynamics within them. Companies within a PN are subject to horizontal (intra-layer),
vertical (inter-layer) and diagonal (cross-layer) competitive dynamics, which are enforced
by certain parameters. Since platforms rely on a different, cross-sided network based
business logic, they are able to exploit an additional set of strategies in the context of those
dynamics. We describe these dynamics and strategies in a Matrix (for an in-depth
discussion of the Matrix see Hoeck et al., 2013). The Matrix consists of three columns
representing the parameters for horizontal, vertical and diagonal competitive dynamics in
PN as well as the prevailing possible strategies for merchant and platform companies (see
Table 1).
Table 1. The PN Matrix.
To sum up, consisting of two-sided or even multi-sided platforms and due to cross-
sided network effects, PNs are increasingly complex and concentrated media ecosystems
with a new distribution of market power. Each layer is served by one or a few large fiercely
competing media platforms, which are subject to intra-, inter- and cross-layer competition
and have access to a unique set of strategies.

10
3. Research Design
3.1 Methodology and Sample
As methodology, a qualitative case study was chosen since the aim of the study was
a “complete and accurate rendition of actual events” in an explanatory fashion without the
requirement to manipulate behavioral events (Yin, 2009, p. 4) However, a new twist was
attached to this classical social science methodology. The PN framework i.e. the PN Model,
which makes it possible to map the industry’s platformized market structure and the PN
Matrix with accompanying working definitions for each parameter, guided as theoretical
tools this analysis.
An information-oriented purposeful sampling was chosen to identify critical key
cases, which will have implications for other, less striking cases (Deacon et al., 1999). For
the broadcasting sector, the paper analyzed the strategies of the two big OTT platform
companies in the Belgian market (Apple and Google) vis-à-vis the platform strategies of
the incumbent Flemish distributors and broadcasters. 2
VRT, Medialaan and VIER/VIJF
(part of De Vijver Media) are the major broadcasters in Flanders and Telenet (DVB-C) and
Belgacom (DVB IPTV), for their part, are the two major distributors.
3.2 Operationalization
For the following case study of the Belgian digital broadcasting market, the parameters of
the Matrix were operationalized as follows (see Hoelck et al., 2013 for an extensive
literature review on which the deduction of the parameters is based).
2
It goes without saying that there are more TV streaming devices and set-top boxes with which Apple and Google
compete, e.g. Roku 3, Roku Streaming Stick, Western Digital WD Live & WD Play, D-Link Boxee Box/TV, PlayStation
3 & PlayStation 4, etc. Also Amazon entered the scene with its Amazon Fire TV in 2014, only recently before entering the
telecommunications sector as well, thereby duplicating Apple and Google’s market overarching company set-up (Donna,
2014). However, Amazon Fire TV is not available in Belgium yet.

11
To start with, the ‘intra’-layer parameters’ to assess horizontal competition are (i)
the network’s horizontal density, (ii) the homogeneity of users’ value proposition, and (iii)
the company’s operability (Eisenmann et al., 2006; 2008; Treacy & Wiersema, 1992;
Spengler, 1950; Eisenmann, 2008; Hagiu and Lee, 2008; Lee, 2007; Rochet and Tirole,
2003; 2006; see Table 2). These three parameters determine the degree of horizontal
competition within the ecosystem.
INTRA-LAYER PARAMETERS
HorizontaldDe
nsity
The ecosystem‘s density is determined by the amount of companies in each horizontal layer. A horizontal
layer with a monopolistic structure would be considered denser than a layer with a duopolistic structure.
However, in case of a platform dominated layer, due to the different economic logic of platforms restricting
market entry and mutual existence of platforms within one layer, an oligopoly should already be considered as
a low-density structure. In principle, the lower a horizontal layer’s density, the fiercer horizontal competition
will be.3
Homogeneity
of value
proposition
A company’s value proposition can be oriented towards operational excellence (leadership in price and
convenience), customer intimacy (tailor and shape products and services to the customers’ expectations), and
product leadership (focus on state-of-the art products and services). Since users with similar preferences will
favour the same value proposition, competition in these markets is fierce, because all companies will target the
same user segment. Thus, in general, the more homogeneous the value proposition in the market, the fiercer
horizontal competition will be.
Operability A company can choose to be interoperable with other companies and even sign licensing or sponsorship
agreements. A company is conceived as interoperable, if its products or service can be used via another
company or can be combined with another company’s products and services. In the special case of licensing,
the company retains control over its technology, while in the case of a sponsorship agreement, the technology
is jointly developed. In principle, if the company’s products and services are interoperable, the horizontal
competition between the companies will be more intense.
Table 2. Intra-layer Parameters
The traditional solution of merchant firms to weaken the fierceness of horizontal
competition is horizontal expansion to increase the equilibrium price and hence profits
(Christensen and Raynor, 2003). Platforms, however, can choose the strategy of silo
competition. Then, the platform is combating the other platform next to it in the same
horizontal layer by increasing its grip on the downstream or upstream layers by gathering
companies that can provide complementary products or services through exclusivity
agreements permitting users to multi-home (for a discussion of ‘exclusivity‘ see Hagiu and
Lee, 2008).
3
The following statements about an increasing fierceness of horizontal, vertical or ecosystem-wide competition assume
idealistic market conditions.

12
The second set of ‘inter’-layer parameters’ that assesses vertical competitive
dynamics is (i) the ecosystem’s vertical density in terms of numbers of layers, (ii) the
occurrence of the double marginalization effect, and (iii) possible channel externalities
(Abiru et al., 1998; Spengler, 1950; Perakis and Roels, 2007; Arya and Mittendorf, 2006;
Doyle, 2013; Lipsey & Christal, 2007; see Table 3). These three parameters assess the
degree of vertical rivalry in the ecosystem.
INTER-LAYER PARAMETERS
Thickness An ecosystem with an equal number of firms in each layer is considered equally distributed which makes
vertical integration a dominant strategy. Yet, equality of distribution is a necessary but not sufficient
condition for integration. The ecosystem has to be thick and dominated by only a few firms on each layer;
otherwise horizontal competition makes vertical integration/cooperation or vertical commoditisation
obsolete. In general, the more layers a ecosystem has, the fiercer vertical discord will be.
Double
marginalisation
Double marginalisation arises since companies in different layers will take decisions independently in their
own interest to maximise their own profits instead of the aggregated profit of the whole vertical chain. The
company increases its price over marginal costs and this constitutes a monopoly mark-up on the
complementary companies which are in the following increasing their prices as well and cut supply thereby
deteriorating the efficiency of the chain. Yet, there cannot only be a monetary conflict of interest due to an
independent profit calculation, but it is also possible that the companies in the different vertical layers are
following different non-monetary interests and are consequently striving in completely different directions.
This might not lead to an immediate monopoly mark-up, but rather to long-term inefficiency of the vertical
alignment and an endangerment of the sustainability of the whole chain. In principle, the larger the double
marginalisation effect is, the more intense vertical discord between the companies will be.
Channel
externalities
Another incentive for vertical integration, cooperation or vertical commoditisation is gaining more security
over the market by achieving control over the value chain, which is also saving transaction costs. This is
wishful, if an upstream company tries to reach the same customers as its downstream complementor. An
expansion in this layer via vertical integration/cooperation or destruction via vertical commoditisation can
eliminate risks such as of downstream firms gaining great market power, a denial of essential
complementary services and products, and incomplete information or high negotiation costs. In general, the
greater the channel externalities, the higher the channel discord in the ecosystem will be.
Table 3. Inter-layer Parameters
The traditional solution carried out by merchant companies to mitigate vertical
rivalry is vertical expansion, in form of vertical integration or cooperation since a single
monopoly, duopoly or oligopoly is still more efficient than a chain of them (Spengler,
1950). In addition to the aforementioned possibilities, there is a platform-specific solution
to mitigate vertical rivalry, namely vertical commoditization. A platform can introduce a
vertical merger, which is offering the rival platform’s value proposition highly discounted
or for free to decrease prices and to drive down profits to zero. As a result, the whole layer
is becoming economically irrelevant and vertical competition is mitigated, since it
decreases with the number of vertical layers.

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Finally, ‘cross-layer parameters’ to measure diagonal competition of the ecosystem
include (i) the extendibility of a company’s value proposition, (ii) a possible overlap with
the user base of rivals, and (iii) interface ambiguity (Eisenmann et al., 2006; 2008; 2011;
Evans, 2008; Parker & Van Alstyne, 2012; Zhang and Gao, 2011; Funk, 2002; Kogut,
Walker, & Kim, 1994; Gawer & Henderson, 2007; see Table 4). This set of parameters
describes the diagonal competition in the ecosystem.
CROSS-LAYER PARAMETERS
Extendibility
of value
proposition
A company might be able to extend its value proposition by bundling it with a rival’s offer. The company can
leverage economies of scope to offer the bundle for a discounted price, and if it is a platform business also
envelop a rival platform. In general, the easier extendable a company’s value proposition is, the stronger the
incentive for ecosystem-wide competition will be.
Overlapping
of user bases
A company might have a user base which overlaps with the user base of other companies. Due to this
overlapping, it can easily attract new users to sell its new bundle and in case of a platform set-up even envelop
its rival to improve its market position. In principle, the more companies’ user bases overlap, the stronger the
ecosystem-wide competition between them will be.
Interface
ambiguity
Interface ambiguity arises if there is no clear standard set. In this situation, platform companies have strong
incentives and possibilities to envelop other platforms to improve their strategic position in the network and to
operate more efficiently. In general, the more ambiguous the companies’ interfaces are, the fiercer the
ecosystem-wide competition will be.
Table 4. Cross-layer Parameters
Merchants can use diagonal expansion to diversify into new business areas creating
thereby potentially economic gains and synergies and spreading risk (Doyle, 2013).
Platform companies, however, have also the possibility to carry out the more sophisticated
strategy of envelopment, which is regarded as a popular move to improve the efficiency
and profitability of a platform firm by making use of the specific economic logic of
platform markets (Novelli, 2012). Platform envelopment entails that a platform extends
another platform’s value proposition and offers it in a multi-platform bundle, possibly even
for a lower price, by leveraging overlapping user bases and harnessing cross-sided network
effects and economies of scope to swallow the other platform (Eisenmann et al., 2011). Yet,
our definition of envelopment diverges slightly from the author’s definition. While
Eisenmann et al. (2011) distinguish between the envelopment of substitute, complementary
and functionally unrelated platforms, we subsume the envelopment of a substitute or
complementary platform under horizontal and vertical integration carried out by a platform

14
instead of a merchant business to sharpen the definition. Our definition comes closest to
what the authors describe as the envelopment of a functionally unrelated platform. This
relates to crossing the borders outside the vertical chain, and the horizontal market of a
company. Thus, assets are leveraged in one or another not directly (horizontally or
vertically) related market from a platform with an entirely different value proposition. For
instance, Apple’s entrance in the telecommunications industry with its iPhone was based on
the success of its iPod.
The operationalization of the parameters will be used in the following case study to
assess the competitive dynamics in the Belgian broadcasting industry. We contend that,
assessing the level of competition in the ecosystem and explaining the occurrence and
nature of competitive dynamics as well as strategies can shed light on the complexity of the
new market set-up and the challenges it brings about.
4. Case Study: The Digital Broadcasting Industry in Belgium
In this Section, the PN framework (Model and Matrix) is used to assess the
platformization of the Flemish broadcasting industry. First, we describe with the PN Model
the development of the Flemish broadcasting industry from a classical two-sided market to
a multi-layered PN. Then, the PN Matrix is applied to examine selected platform strategies
in the broadcasting industry.
4.1 Market Structure
4.1.1 Before Digitization: A classical two-sided market
In the analogue world, there was a direct relationship between broadcasters and
consumers, and distributors were merely ‘transporters’ of electronic signals. The industry
structure was routinely characterized as a typical two-sided market, in which broadcasters,

15
especially private ones, operate as platforms that intermediate between advertisers and
consumers (Pauwels & Donders, 2011).
The specificity of this type of market is that advertisers derive a positive utility from
the participation of as many customers as possible to the broadcaster’s platform, while for
customers mostly negative effects are associated with being exposed to advertising
messages. This is one of the reasons why broadcasters usually let one side of the market
(i.e. advertisers) cross-subsidize the participation of the other side of the market (i.e.
customers).
This persistent cross-subsidization, combined with the cross-sided network effects,
lead to the fact that broadcasters cannot maximize profits in each single market, but need to
carefully consider the effect of pricing decisions at one side of the platform on the other
side. This effect can explain why slower growth in advertising revenues leads to pressure to
increase income from customers. Also, it implies that broadcasters need to treat
complementary businesses (such as advertisers) as clients rather than as merchant supply
chain partners, and are thus incentivized to ensure healthy margins and sustainable
ecosystems for these businesses. Yet, that the private broadcasters are in fact ‘selling the
audience’ to advertisers due to this business set-up (comparable to Facebook selling
customer data to other companies) has been criticized widely in political economy of
communications research. Often authors have argued for the superiority of public service
broadcasting, providing programs to all people regardless of their appeal to advertisers (see
e.g. Garnham, 1990; Hackett, 2001).
Summing up, the traditional broadcasting industry is a classical example of a two-
sided market serving both audiences and advertisers while subsidizing the former and
imposing charges on the latter group.

16
4.1.2 After Digitization: A Platform Network
In the digital era, telecommunications companies enter broadcasting markets,
Internet companies enter broadcasting markets, cable companies enter both broadcasting
and telecommunications markets, and so on. Digitization led to a shift in the production,
distribution and consumption of media content and the basic structure of the industry
changed and became increasingly complex. In Flanders, the switch between analogue
terrestrial and digital television was completed on November 3, 2008. Since then, two main
tendencies can be observed.
First, the introduction of digital TV resulted in an explosion of the number of (often
thematic) TV channels, and made a range of interactive and on-demand services and new
revenue streams for existing players possible. Especially, digitization provided the digital
TV distributors with a direct customer interface in the form of the Electronic Program
Guide (EPG). This has enabled TV distributors, whose business models up to that point had
resembled that of utility providers, to start playing a two-sided platform role themselves,
i.e. between 3rd party service providers (broadcasters) and customers, thus regaining
market power. The distributor Telenet has introduced its own digital platform Yelo TV,
while distributor Belgacom created Proximus TV.
Second, technology platform companies such as Apple and Google used these
developments to enter the broadcasting industry and to expand their product portfolio.
Apple was a forerunner, and already started shipping its Apple TV in 2007. Google entered
the market in 2010 with Google TV. In 2013, Google added Chromecast as a
complementary device to its portfolio. Chromecast enables a connection to Android
devices, iPhone, iPad, or the Chrome Web browser to deliver content wireless on a larger

17
screen (Kovach, 2013). Just recently, at the Google I/O 2014 conference, Google revealed
Android TV, the successor of Google TV. By introducing Apple TV and Android TV,
Apple and Google were entering in direct competition with the prevailing national players.
However, also more specialized platform companies used the developments to start a new
business, such as Netflix, which came to Belgium in September 2014.
As a result, there are now two platform layers that interact with each other and serve
as customer/supplier for each other, namely distributors and broadcasters. Figure 2 gives a
high-level image of the today’s double platform market structure in the Flemish audiovisual
media industry.
Figure 2. The Flemish broadcasting industry as a PN.
Like many media industries, the broadcasting industry is furthermore evolving from
a two-sided towards a multi-sided market, with amongst others the introduction of
independent production houses that produce content for various broadcasters’ and
distributors’ platforms. These then in a sense may become a third side of the (double)
platform market. The reconfiguration of revenue streams and the associated conflicts thus
also extend to the independent producers and rights holders.
Platfom
Layer 1
Advertiser
Platfom
Layer 2
VRT VIER/VIJF
Google TV
Netflix
Consumers
Production
companies
Right
holders
Yelo TV Apple TV
Proximus TV
Medialaan

18
To sum up, digitization and the accompanying market entrance of technology
companies lead to an emergence of a double-layered PN. Today’s Belgian broadcasting
industry consists of two layers of two- and multi-sided platform companies.
4.2 Competitive Dynamics and Strategies
4.2.1 Intra-layer
It can be observed that the incumbent distributors and broadcasters as well as the
newly entering platform companies try to gain a competitive advantage in their respective
horizontal layer by exploiting horizontal dynamics.
For an assessment of the horizontal competition within the industry, the
concentration of the horizontal layers is decisive. The concentration is assessed via the
parameter ‘horizontal density’ in the PN Matrix (see Table 2). Accordingly, both the
distribution and content provision i.e. broadcasting layer can be regarded as fairly
concentrated. In the distribution market Telenet and Belgacom are the two main players
with a market share of 80% and 15% respectively in a country, which has one of the highest
cable penetration in the EU. Indeed, Telenet can be regarded as the monopolistic owner of
the cable infrastructure without any serious competitive pressure. As noted by Evens, Van
Rompuy, & Donders (2014), access to Telenet’s cable network can virtually not be forgone
by broadcasters. The distributors are mostly challenged by the newly entering OTT
platforms of Apple and Google. Offering video-on-demand (VOD) and streaming services
as well, they enter in direct competition with the distributor’s platforms Yelo TV (Telenet)
and Proximus TV (Belgacom). The structure of the content provision i.e. broadcaster’s
layer is oligopolistic. Main public broadcaster VRT, leading private broadcaster Medialaan
and VIER/VIJF account together for more than 80% of the viewer’s market. However, the
broadcaster’s supremacy might be challenged by newly entering content platforms such as
Netflix, which produce also their own content e.g. the popular series ‘House of Cards’ and

19
’Breaking Bad’. Cable subscription in Belgium is significantly lower than in the US, which
makes it difficult to project whether Netflix will be a similar dominant player like in the
US. Yet, Netflix is often not competing as a stand-alone player, but integrated in the offer
of other OTT platforms such as Apple TV. It remains to be seen, whether the new entrants
will be able to change the competitive situation significantly in the future. 4
Competition can be further invigorated when companies target similar customer
segments. This choice is described in the PN Matrix by the parameter ‘homogeneity of
value proposition’ (see Table 2). Apple usually aims for ‘product leadership’ by offering a
product and service of premium quality, which is innovative and comes at a premium price
e.g. with its iPad series. Also for its Apple TV, Apple tweaked its product portfolio
significantly over the years offering among others an extensive video on-demand service
via its iTunes store, as well as support for streaming services like Netflix and subscriptions
to specific offers like the NBA league or Wall Street Journal Live. However, although
being the first major technology platform, which entered the Belgian broadcasting market,
broadcasting never seemed to be the core focus of Apple’s business. Former CEO Steve
Jobs used to term its broadcasting presence in fact a “hobby” (Yarow, 2013). Yet, Apple’s
focus seems to have changed mid-2015. Apple announced a new Apple TV with a
significantly extended value proposition, especially concerning its application offer
(Etherington, 2015). This is also reflected in the fact that the Apple TV has suddenly a
prominent position on Apple’s website.5
Contrary to Apple’s TV box, Google’s Android
TV is not a stand-alone device, but an operating system (OS) built not only in its own
Nexus series but also in smart TVs e.g. of Sony, Nvidia, Razer, Asus and in the future also
4
In the US, where OTT streaming is already established, now-incumbent players Netflix, Hulu and Amazon are
challenged by a new wave of competitors i.e. by the new streaming services of HBO, Apple, Sony, and Dish. As a result,
competition in the market is further invigorated (Steel, 2015).
5
In order to reach the ‚Apple TV’ section, it was necessary to click through the ’Store’ menu first. Since recently, ‘TV’ is
part of the website’s topbar, next to ‘iPhone’, ‘iWatch’ and other successful Apple products.

20
Sharp and Philips and other devices from third-party OEMs. Google’s Android TV offers
similar streaming and VOD services like Apple in combination with access to the Google
Play store. The company’s low-cost device Chromecast can be connected to any other TV
in order to mirror content e.g. from a tablet, laptop or smartphone on a TV. Similarly like
its OS in the telecommunications market, Google puts therefore rather emphasis on
‘operational excellence’ and aims to cover a bigger segment of the market and targets also a
lower price range. The incumbents chose a different approach for their platform. Telenet’s
Yelo TV and Belgacom’s Proximus TV are bundled with an Internet and broadcasting
subscription. Over the years, the national incumbents have invested in the development of
several non-linear services including the supply of VOD and additional thematic channels
e.g. for sports enthusiasts or children. The supply encompasses movies and series for which
Telenet and Belgacom have entered into agreements both with local and international
producers and distributors. Unlike the new entrants, both incumbents are able to offer an
interactive library of catch-up TV and archival programs in cooperation with Flemish
broadcasters. Subscribers can then pay to (pre)view this content during forty-eight hours.
Different packages can be booked: Telenet offers the basis package ‘Play’ and the extended
package ‘Play more’. Also Belgacom lets its customer chose a certain package such as its
’Movie and Series Pass’, or ‘11+’ (football). Thus, both players put emphasis on ‘customer
intimacy’ by tailoring and customization its products and services for its viewers.
Furthermore, the companies made strategic choices about the operability of their
platform. This choice is described in the PN Matrix by the parameter ‘operability’ (see
Table 2). Concretely, the openness of the platform can differ in terms of availability and
connectivity, impacting competition in a market. Apple’s Apple TV ecosystem itself is
closed, similar to Apple’s iPhone or e-book system. Apple TV works with AirPlay, which
is preinstalled on all iOS gadget. Content from other devices cannot be ‘mirrored’ i.e.

21
streamed on Apple TV. Thus, the company is creating strong lock-in effects to its products
and high switching costs. Google pursues with its Android TV (and Chromecast as alluded
above) another, more open strategy. Google chose to allow the cast of content from any
Android or iOS device, MacBooks, Chromebooks or even Windows computers to its
Android TV. The national incumbents Telenet and Belgacom chose a completely open
approach as well, enabling operability with the major OSs iOS, Android and Windows, as
well with all kinds of laptops and computers. However, unlike Apple and Google they do
not own an IT ecosystem and lack therefore the opportunity and incentive to build a closed
ecosystem.
Summing up, the horizontal structure of the broadcasting and distributing market is
quite concentrated. Telenet and Belgacom built open systems and chose the strategy of
customer intimacy. Apple, however, chose the premium strategy of product leadership and
created a completely closed ecosystem permitting any kind of operability and Google
decided for a modularized approach and aimed for operational excellence in order to reach
a mass market.
4.2 Inter-layer competitive dynamics
The companies also interact vertically with each other. The most interesting
dynamics takes place between the broadcaster’s and the distributor’s layer.
The vertical market structure can be described by the parameter ‘vertical density’ in
the PN Matrix (see Table 3). Since the PN of the Belgian broadcasting industry is
horizontally concentrated, companies have high incentives to attempt vertical expansion or
to use the platform strategy of vertical commoditization to strengthen their position. Indeed,
Telenet just acquired recently a 50% stake in De Vijver Media i.e. broadcaster VIER/VIEJF
(Briel, 2014). As Evens, Van Rompuy, & Donders (2014) outline, Telenet attains several
advantages. The distributor gains control over the whole audiovisual value chain and can

22
engage in practices such as favoring programs and services of VIER/VIJF or charging more
distribution fees to competitors. Besides, Telenet can gain sensitive information by sitting
on both sides during carriage negotiations. Also the new entrants Apple and Google
engaged in vertical strategic actions. Both ensured their access to content in the value chain
by cooperation with content providers such as Netflix. Yet, at present the impact of the
Apple and Google seems far more disruptive in the music, telecommunications and
publishing market than in the broadcasting market in Belgium, since they cannot offer
Flemish broadcasting content. In the US, however, Apple was able to announce lately the
start of a dedicated streaming service, which will include content of major broadcasters like
ABC, CBS and Fox. Apple was attracting broadcasters with detailed viewer statistics – a
strategy that Apple might pursue in Europe as well and that Google might follow
(Etherington, 2015).
Indeed, in a PN, the relationship between two platforms operating vertically on top
of each other is frequently fraught with tensions. A further important factor is thus the
possibility of a conflict of interest with companies in the vertical upstream or downstream
layers, which is described in the PN Matrix with the parameter ‘double marginalization’
(see Table 3). In the broadcasting industry the main tensions arise around the topics of
retransmission and carriage fees i.e. the payment of fees from distributors to the
broadcasters for the distribution of content on the one hand, and the payment of transport
and distribution costs from broadcasters to distributors in exchange for carriage on their
networks on the other hand. For instance, the public broadcaster VRT, which enjoys a
must-carry status, does not pay a carriage fee while receiving (albeit not strictu sensu) a
retransmission fee. Private broadcasters (Medialaan and VIER/VIJF) targeting the Flemish
market pay a carriage fee and receive a retransmission fee, which is the subject of a major

23
conflict between the two layers.6
In Belgium, the new entrants do not have to face such
conflicts so far, since they rely solemnly on the Internet as infrastructure. However, also the
relationship between ISPs and OTT platforms bears potential for conflict. In the US,
Netflix signed a deal with Comcast to ensure a direct and fast Internet access to its
customers, reportedly after the average speed for the Netflix-stream dropped from 2,07
Mbit/s to 1,51 Mbit/s at the beginning of 2014 in the Comcast network (Böhm, 2014).
These deals are not uncommon in the US, several big companies including Google,
Microsoft and Facebook are already paying for a faster access (Ramachandran &
Fitzgerald, 2013). Likewise, in Australia and New Zealand, Netflix started to sign ’un-
metering agreements’ with ISPs, which ensure that Netflix’s traffic does not count as part
of consumers Internet traffic bundle. (Orlowski, 2015). So far, these practices which are
accused of violating net neutrality are not common in Belgium, however, they might
spread.
In parallel, there is further source of vertical rivalry in the PN described in the
Matrix with the parameter ‘channel externalities’ (see Table 3). With the distributor’s
introduction of their own platforms, broadcasters and distributors try to reach the same
actors in the vertical value chain. On the one hand, both try to reach the same viewers; on
the other hand broadcasters and distributors struggle to reach advertisers. The conflict about
reaching the viewers is centered on the distributor’s offer of non-linear i.e. delayed
viewing. Broadcasters argue that it is interesting for them to offer films of which they have
acquired the linear rights in a non-linear way as well, but are bound by the exclusive
offerings of the operators. Also the revenue split is under debate. After deduction of VAT
and the provision for author rights, the remainder of VOD income is split between the
distributor and the broadcaster. The ratio is usually 60% for the distributor and 40% for the
6
Other conflicts besides those about the level of the fees include the criteria for the fees, and passing on the fees to the
customer. See for an in-depth discussion Bleyen et al., 2013.

24
broadcaster, or 50-50%, and varies per broadcaster. The second conflict evolves around
advertising revenue. VOD services enable viewers to skip advertising, thus posing a threat
to broadcasters’ current business models that mainly rely on advertisement revenues. After
all, if advertisers feel that they can no longer reach the audience they are paying for, it
seems inevitable for advertising revenues to drop. Calculations of broadcasters indeed
indicate that delayed viewing jeopardizes considerable their advertising revenues. Whereas
80% of private broadcasters’ income still comes from advertising, this percentage is
decreasing year-on-year, and income from consumers is becoming more important. Hence,
broadcasters ask for remuneration for the exploitation of broadcasters’ content which the
distributors decline. As a result of the conflicts, the three major Flemish broadcasters were
also launching a service for live streaming and non-linear catch-up TV, called ‘Stevie’
(Briel, 2013). Lately, the major Flemish broadcasters have achieved an important victory in
this respect in a dispute against Telenet before the Belgian Constitutional Court. They
defended the Flemish decree on ‘signal integrity’, the first regulation in an EU Member
State to legally organize broadcaster-distributor relationships. Accordingly, distributors
have to seek the broadcaster’s prior consent before launching new signal functionalities
such as delayed viewing, or program suggestions (Hoyng & Monegier, 2015). However,
there are fears that enforcing rules on national incumbents might be advantageous for the
OTT platforms of international players such as Apple and Google, which are not affected
by such regulations (Van den Bulck & Donders, 2014).
Summing up, it becomes apparent that all platforms have strong incentives to
expand in the adjacent layers in order to gain more control over the value chain and to save
transaction costs. While national incumbent Telenet already engaged into vertical
integration, it becomes apparent that the OTT platforms start to invest in similar practices,

25
although not in Belgium yet. In the meantime, the Belgian national incumbents are
struggling to align their interest to the benefit of OTT players.
4.3 Cross-layer competitive dynamics
Finally, it is interesting to analyze the industry’s cross-layer competition.
Companies from other sectors use cross-layer competitive dynamics to enter adjacent
markets. Thus, this last subchapter will focus solemnly on the new entrants Apple and
Google. The companies exploited cross-layer dynamics in order to enter the broadcasting
industry and to get a foothold in the Belgian market dominated by the incumbent
distributors Telenet and Belgacom and the Flemish content aggregators VRT, Medialaan,
and VIER/VIJF.
The first cross-layer dynamic, which enabled the technology platforms to penetrate
the broadcasting market, is described by the parameter ‘extendibility of value proposition’
(see Table 4). Both, Apple as well as Google smartly extended their business into the
broadcasting market by bundling their core value proposition with new functionalities.
Apple built its TV box around its VOD and music service on iTunes as well as its
application store AppStore. Google built its products around its search engine Chrome as
well as its application store Google Play. However, unlike in the US, so far neither of them
could include the national broadcaster’s offer in their value proposition.
In this context, the cross-layer parameter ‘overlapping of user bases’ of the PN
Matrix is also relevant (see Table 4). Apple used its established user base to enter the
market, e.g. from iPod, iPhone, its laptop and personal computer series. Being already
familiar with the typical design of Apples OSs, Apple enables its customers to use the
content from their other Apple devices on its TV box. Pictures and videos of Apple device
owners can be synchronized. The company could draw on a large user base and created
already lock-in effects with its customers, who would encounter high switching costs when

26
changing to another platform. Also IT firm Google could rely on a large user base outside
the broadcasting business, created through its success in other industries such as
telecommunications. Besides, Google has several advertising-based but free services such
as Google Mail, Google Maps and its search engine with tremendous reach.
Additionally, interface ambiguity was given, since during the entrance of Google
and Apple no clear format standard for OS’s of TV boxes was set. This phenomenon is
described in the PN Matrix with the parameter ‘interface ambiguity’ (see Table 4). The
existence of interface ambiguity was especially advantageous to Google, who based its set-
up box on its native Android OS. The announced cooperation with device manufacturers
such as Sony or Phillips to offer an integrated solution for TVs indicates that Google is
aiming to imitate the success story of its OS in the telecommunications market in the
broadcasting market (Kelion, 2014b). Besides, Google’s Chromecast stick seems to be an
appealing and cheap solution for customers as long as no standard is established. The stick
can transform any television set with USB port into an IPTV by mirroring content from
laptops and phones. Also Apple introduced a TV box which can be connected to any TV.
Yet, by limiting certain functions to users of Apple products, Apple still promotes its closed
platform system.
Thus, both companies used their user base of their successful IT services to get a
foothold in the market and to implement their own standard. While Apple could rely on its
loyal premium customers, Google could draw on a mass audience generated through its free
services. Yet, without broadcasting content, the services remain for the time being rather
complementary.

27
5. Discussion
The case study assessed the platformization of the market structure of the Belgian
(Flemish) digital broadcasting industry and explored the strategic moves of incumbent
players and new entrants within the changing industry environment. In the following, the
results of the study and its possible practical and conceptual implications are discussed in
further depth.
Due to digitization, the technology companies Apple and Google were able to enter
with their platforms the Belgian broadcasting industry. Also the incumbents embraced the
new technological opportunities. While the broadcasters VRT, Medialaan, and VIER/VIJF
have always been set-up as a platform mediating between audience and advertiser, the
distributors used the changing market situation to extend their role from signal transmitters
to content aggregators and launched their own platforms Yelo TV and Proximus TV.
The case studies showed how this ‘layered’ platformization and the diverging nature
of the competitive dynamics in PNs affected the companies’ decisions concerning strategic
partnerships and technological design (see Table 2).
INCUMBENTS NEW ENTRANTS
Intra-layer
competition
Open approach with costumer intimacy focus Different approach (closed vs. open) with different
focus (product leadership vs. costumer intimacy)
Inter-layer
competition
Volatile relationship between broadcasters and
distributors makes vertical expansion highly
attractive
No vertical strategic attempt in Europe so far, but
could already be observed in English-speaking
countries where the services are more established
(US/AU/NZ)
Cross-layer
competition
- Try to establish their own standard, built their TV
service around their core value proposition and
used their existing user base to enter the market
Table 2. Results of the case study
The broadcasters and distribution market is highly horizontally concentrated. An
increasingly concentrated layered platform market can be dangerous, especially in a smaller
market, since pluralism might fall short in the long run. The newly entering OTT platforms
could potentially challenge the power distribution in these layers, but did not seem to be
powerful enough in the Belgian market yet. However, the international player’s incentive is

28
rather an effective and profitable extension of their product portfolio than the preservation
of Flemish audiovisual content. As a consequence, the aforementioned developments
should not be perceived without concern. Furthermore, it can be observed that all players
bundle their new platform with their prevailing core business: The OTT players with their
IT services, and the former incumbent distributors with their cable subscription service.
While Belgacom’s and Telnets’ offer in terms of openness and value proposition are quite
similar which leads to fierce horizontal competition between the two players in areas were
both distributors are available, the OTT players takes advantage of the PN-specific cross-
sided network dynamics in different ways. Apple builds closed platform systems i.e.
platform silos, which enables Apple to accelerate the growth of its platform by coupling
cross-sided network effects of the different layers of its system i.e. device, OS, and
application store (see also Hoelck et al., 2013). On the contrary, by choosing a modularized
approach, Google is making its OS available for a wide range of vendors. This enables
Google to exploit economies of scale which fuel cross-sided network effects thus
contributing to the overall growth of the platform. Ceteris paribus, while both strategies
enable the new entrants to grow their business by taking advantage of the dynamics in
platform markets, the diverging approach relaxes competition between the new entrants.
The intensive horizontal competitive situation between the incumbent players is
exacerbated by a constant clash of interest between distributors and broadcasters in the
vertical value chain. It is clear that a ‘double platformization’ unavoidably leads to strong
tensions between both types of platform ‘wannabes’, even if they are at the same time
collaborators within the media value chain. They need to work together in order to create
and capture value, and are thus part of the same value network, but threaten at the same
time to disconnect each other from consumers and advertisers. This leads to the inter-firm
dynamic of ‘co-opetition’, i.e. the collaboration between firms with incomplete congruence

29
of interests, and often in the presence of market power asymmetries (Brandenburger and
Nalebuff, 1996; Dagnino and Padula, 2002). The company’s new strategic incentives are
directly at odds with the platform ‘ecosystem’ logic (Weyl, 2008). This makes vertical
integration highly attractive as seen in the case of Telenet acquisition of part of the
broadcasters VIER/VIJF. Abroad, where OTT players are already further established in the
market, also these players engage in similar practices of vertical expansion strategies in
order to commoditize adjacent layers. However, currently, the incumbent players are
involved in resource-intensive disputes, which the new entrants do not have to face and
which might even result in competitive advantages for them (e.g. in the case of the Flemish
decree on signal integrity).
When it comes to the exploitation of diagonal competitive dynamics, Google and
Apple clearly played their cards right by taking into consideration the aspects of interface
ambiguity and their prior user base to establish themselves in the industry. Yet, none of
them could provide a true alternative to the incumbents’ offer, since neither Apple nor
Google included broadcasting content in its Belgian offer. Unlike in the US, where the
platforms provide a strong alternative to classical broadcasting, their value proposition
remains complementary in Belgium. As such, both OTT players managed to enter the
market, but did not achieve a strong position or were even able to carry out an envelopment
attack towards the national incumbents.
In general, three main implications can be derived:
(i) Incumbents vs. incumbents: It becomes apparent that the incumbents are engaging
in resource-intensive horizontal and vertical competition. A further diversification
of their value proposition might relax horizontal competition, while vertical rivalry
might be mitigated via vertical cooperation or expansion (although competition
authorities are naturally observing the latter with concern)

30
(ii) New entrants vs. new entrants: The new entrants chose a strategic set-up that is
diverse enough to avoid horizontal and vertical competition with other newly
entering platforms, which is due to the logic of PNs highly demanding.
(iii) Incumbents vs. new entrants: While the new entrants avoid direct competition with
each other, it becomes apparent from the oversea markets that the OTT players
would not recoil to engage in direct competition with incumbents. While none of
the new entrants have gained a strong market position yet, their strategic set up
might outplay in a few years time when they further established themselves as part
of the digital Belgian broadcasting market. Distributors and broadcasters should be
cautious when it comes to broadband deals (see Netflix case in AU/NZ) or content
deals (see case in the US), since both kind of arrangements might substantially
strengthen the market power of the new OTT platforms to the detriment of Belgian
incumbents.
In future research, studying the strategies of smaller platforms for Flemish content
such as Bhaalu and why others such as WeePeeTV, quit their service, could enable us to
further enhance our understanding of the Flemish digital market. Moreover, it would be
interesting to apply the PN framework in corresponding national industry cases. A
comparison of cases and analysis of ‘best practices’ across nations might further enhance
our understanding of the Flemish situation. In the Netherlands, Germany, the United
Kingdom, France and other European countries as well as the US, South-America and Asia
etc. challenges concerning broadcasting and distribution arise as well. A range of issues
could be explored in the future in this respect like the strategies of OTT player Amazon
(Fire TV) or the consolidation of the US market for OTT services. This would enable us to
derivate patterns and factors that define and shape the power structures of the broadcasting

31
sector in the digital age. Additionally, it might be worthwhile to explore in detail the
interconnections between the broadcasting and telecommunications industry.
6. Conclusion
This paper attempted to shed light on the competitive dynamics that occur in the
new market set-up of the broadcasting industry, based on the theoretical framework of PNs,
which extends platform theory. PNs are characterized by horizontal (intra-layer), vertical
(inter-layer) and ecosystem (cross-layer) dynamics. Accordingly, platform firms have to
adjust their competitive strategy to achieve and maintain a dominant market position. To
explain the platformization of industry structures and to assess the competitive behavior
within PNs, the paper used the author’s PN framework, consisting of the PN Model and PN
Matrix. The framework was applied in a case study of the Flemish broadcasting industry
The case study indicated that contrary to the new entrants, the national distributors
chose for their platform a quite similar approach in terms of value proposition and
operability, which leads to fierce competition between the incumbents. Also, the dynamics
delineated in this paper indicate that the relationships between broadcasters and distributors
are fraught with tensions that relate directly to the new double platform structure of the
industry. Flemish broadcasters and distributors nevertheless have a strategic incentive to
preserve each other’s economic sustainability. The offer of Apple and Google’s platform is
currently rather complementary, since they do not have access to Flemish broadcasting
content. Hence, the new entrants could establish themselves in the market, but were not
able to extend and add to their competitors’ value proposition - a possible reason why
Google and Apple did not achieve a strong foothold in the market yet.

32
All in all, by mapping the prominent players in the digital field, a first
comprehensive picture of the dynamics and strategies in today’s digital broadcasting
market could be drawn. The paper could therefore not only address a theoretical problem
but tackled also concrete issues of the digital broadcasting ecosystem bearing importance
for all actors in the media ecosystem.

33
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