The medium Television in Germany looks back on a more than 70-years old history. Since the first regular television programme was broadcasted in 1935 – which has been the first worldwide – television was subject of permanent change. Broadcasting and recording techniques, end devices, public perception and acceptance and content developed significantly over the decades. Starting with a single channel broadcasting black and white free-to-air, today consumers with the proper equipment can receive hundreds or even thousands of different channels that serve every imaginable need. Free-to-air broadcasting was little by little replaced by cable and satellite broadcasting, starting in 1983 respectively in 1988. Hand in hand with the digitisation era a new medium arose in the 1990’s: broadcasting via the internet. Due to high bandwidth requirements this distribution channel developed slowly. Even nowadays this represents the bottleneck of the potential “TV of the future”, called Internet Protocol Television (IPTV). However, IPTV has yet earned an early round of applause which is legitimated by the numerous advantages it offers for the consumer as well as for the distributer, content provider and advertiser.
Table of Contents
1 Introduction
1.1 Problem Formulation
1.2 Research Questions
1.3 Methodology
1.4 Thesis Organisation
2 Terms and Definitions
2.1.1 IPTV
2.1.2 Technological Fundamentals of IPTV
2.1.3 The IPTV Value Chain
2.1.4 Internet TV
2.1.5 Hybrids
3 Literature Review
4 Theoretical Framework
4.1 Market Analysis – Porter’s Five Forces
4.1.1 Threat of New Entrants
4.1.2 Intensity of Rivalry among Existing Competitors
4.1.3 Threats of Substitute Products or Service
4.1.4 Bargaining Power of Buyers
4.1.5 Bargaining power of suppliers
4.2 Business Model Theory
5 Market Overview
5.1.1 Player in the Market
5.1.2 Legal Framework
5.1.3 Licensing of content
5.1.4 Market Drivers & Restraints
6 Case Study T-Home
6.1 Company Description
6.2 Analysis of German IPTV Market with Porter’s Five Forces
6.2.1 Threat of New Entrants
6.2.2 Intensity of Rivalry among Existing Competitors
6.2.3 Pressure from Substitute Products
6.2.4 Bargaining Power of Buyers
6.2.5 Bargaining Power of Suppliers
6.2.6 Conclusion
6.3 The Business Model of T-Home
6.3.1 The Business Model Framework
6.3.2 Critical Design Issues for IPTV in Germany
6.3.3 The Architecture of T-Home
6.3.4 The T-Home Revenue Model
6.3.5 Further IPTV Revenue Models
7 Results
8 Conclusion
9 Appendix
9.1 Internet Survey
9.1.1 Questionnaire
9.1.2 Outcome of the Questionnaire
9.2 Interviews with T-Home Customers
10 Bibliography
Objectives & Core Themes
The primary objective of this thesis is to analyze the German Internet Protocol Television (IPTV) market to identify critical design issues for successful business models and uncover new revenue streams. By applying Porter’s Five Forces and the business model framework, the study examines the competitive landscape and strategic requirements for market players, specifically focusing on T-Home.
- Competitive landscape and forces in the German IPTV market
- Business model analysis using the framework of Faber
- Critical design issues for IPTV success in Germany
- Strategies for customer retention and service differentiation
- Potential for future revenue models in IPTV
Excerpt from the Book
6.2.1 Threat of New Entrants
Since companies that enter certain markets always have the desire of gaining market shares, those new entrants increase the level of competition. This threat, however, depends on “the barriers to entry that are present, coupled with the reaction from existing competitors that the entrant can expect” (Porter, 1980: 7). Thus, high entry barriers and/or expectations of sharp quittance lower the threat of new entrants. Potential barriers to entry are the following:
Economies of scale occur when large volumes of a product are produced and, as a consequence, the cost per unit is declining. Chandler defines economies of scale as “…those that result when the increased size of a single operating unit producing or distributing a single product reduces the unit cost of production or distribution” (Chandler, 1990: 17). Potential new entrants can thus choose between entering the market either with a large production volume and a higher risk or a small production volume and cost disadvantages. However, economies of scale are not the only cost advantage established firms can experience in contrast to new entrants. Firms that have their products already on the market could have gained valuable experiences that allow them to produce or market their product more efficiently or just cheaper. Such learning or experience curve effects can also be triggered by workers who improve with their individual experience for example. Since companies, which already have products or services on the market, possess a certain level of brand identification and customer loyalty, new entrants need to overcome those loyalties. Usually this product differentiation is connected with large spending of capital and time. Large capital requirements for market entry limit the amount of potential entrants significantly, because in many cases such costs can not be recovered. If customers in the market are faced with switching costs, this can be considered as a barrier to entry. Farrell and Klemperer (2002) state that "a consumer faces switching cost between sellers when an investment specific to his current seller must be duplicated for a new seller". This may include employee retraining costs or the necessity of purchasing new devices. If a company enters a new market, it needs secure access to a distribution channel in order to provide future customers with its products or services. However, since often the most common channels are already “occupied” by established companies, the new entrant needs to persuade the channels from its product or service to distribute it. A country’s government can also create barriers to entry. The German government for instance created such a barrier with the allocation of UMTS licenses for mobile telecommunication providers. Further examples are completely regulated industries like railroads.
Chapter Summaries
1 Introduction: Provides an overview of the history of television in Germany and defines the research problem, objectives, and methodology for investigating the IPTV market.
2 Terms and Definitions: Clarifies terminology regarding IPTV, Internet TV, and hybrid services, while explaining the technological foundations and the value chain of IPTV.
3 Literature Review: Outlines the theoretical and academic foundation of the thesis, including existing literature on business models and Porter's Five Forces.
4 Theoretical Framework: Describes the analytical tools applied in the thesis, specifically Porter’s Five Forces and business model theories.
5 Market Overview: Surveys the German market, identifying key players like Alice and Arcor, and discusses the legal framework and market drivers.
6 Case Study T-Home: Applies the theoretical frameworks to T-Home, analyzing the competitive forces and the specific business model, including design issues and revenue streams.
7 Results: Summarizes the findings regarding market competition, critical design issues for business modeling, and potential new revenue sources.
8 Conclusion: Offers strategic recommendations for T-Home to improve its market position through service differentiation, QoS focus, and strategic partnerships.
9 Appendix: Presents the methodology and results of the conducted consumer survey and customer interviews regarding T-Home's IPTV service.
10 Bibliography: Lists all academic and industry-related sources referenced throughout the thesis.
Keywords
IPTV, T-Home, Business Models, Porter's Five Forces, Telecommunication, Media Management, Triple Play, VDSL, Set-Top Box, Customer Retention, Market Analysis, Revenue Models, Digital Television, Quality of Service, Content Portfolio
Frequently Asked Questions
What is the core focus of this bachelor's thesis?
The thesis focuses on analyzing the German IPTV market and the business model of T-Home to understand how service providers can achieve market success.
Which theoretical models are used in this research?
The author primarily utilizes Michael Porter’s Five Forces for market analysis and the business model framework developed by Faber to scrutinize the service provider's strategy.
What is the primary research goal?
The goal is to answer questions regarding which competitive forces influence the market, which design issues are critical for business modeling, and which models generate new revenue for providers.
What scientific methods were employed?
The methodology includes an extensive literature review, analysis of industry-related publications, a consumer survey with 23 participants, and interviews with T-Home customers.
What topics are covered in the main section?
The main section covers terms and definitions of IPTV, a detailed market overview of Germany, a strategic analysis of T-Home using Porter's Five Forces, and an in-depth examination of T-Home's business model framework.
Which keywords characterize this work?
Key terms include IPTV, T-Home, Business Models, Porter's Five Forces, Triple Play, VDSL, Customer Retention, and Quality of Service.
How is the competitive intensity in the German IPTV market assessed?
The analysis concludes that competitive intensity is moderate, with the highest pressure coming from substitute products like cable TV and the bargaining power of suppliers.
What is the author's final conclusion regarding T-Home's service?
The author concludes that T-Home needs to improve its quality of service (QoS) and provide clearer value-added services, as consumer perceptions often do not match the company's intended value proposition.
How does T-Home differentiate itself from cable providers?
T-Home utilizes triple and quad play bundles and VDSL infrastructure to offer a bundled service package, although it faces difficulties in differentiating its content offerings from digital cable competitors.
- Quote paper
- Nikolas Fritz (Author), 2008, Internet Protocol Television in Germany – Analysing Business Models for Market Success, Munich, GRIN Verlag, https://www.grin.com/document/118703
