Effects From Privatizing A Television Market, the Influence of Mobile Advertising on Movie Box Office, and Causal Relationships Between Word of Mouth and Movie Ticket Sales

Abstract

The first article in this issue finds privatization of the Croatian television market led to decreasing concentration with a foreign-owned channel replacing government television as the dominant broadcaster in the market. The second article uses data on mobile Location-Based Advertising in China to show these ads can substantially increase movie ticket sales for up to nine days after a consumer receives the ad. The third article uses causal analysis of the relationship between Word of Mouth and movie box office in Taiwan, with findings that show when marketers should encourage positive online comments and discourage negative online comments. The first article is “Media Control: A Case for Privatization in Transitional Economies” by Fran Galetić, Marina Dabić and Timothy Kiessling. This study examines what happened when the government controlled television market in Croatia was liberalized to allow privately owned broadcasting. The market in Croatia is similar to markets in other recent members of the European Union, therefore this study offers insights about privatization for similar EU countries and candidates to join the EU. Concentrated media ownership can threaten diversity of expression and create autocratic control of mass communication. Television strongly influences audiences, so it’s important that television programs reflect diverse opinions and ideas. Therefore, liberalization of government controlled television markets “is a very important step in each country that is moving to a democratically controlled government” (p. 113). The Croatian market was monopolized by three government controlled television channels until 2000. Privatization began in 2000, resulting in 11 national channels, both public and private, by 2014. Concentration in the Croatian television market was measured as the share of all viewers that each national channel had, with the total for all channels equaling 100 percent. This method did not include viewers watching local or specialized channels. New channels entered the market throughout the study. The Herfindahl-Hirschman index in the Croatian television market diminished throughout the study, indicating decreases in concentration. By 2014, the HHI was below 1800, meaning the market was moderately concentrated. The study also used regression to conduct a trend analysis that predicted the market share for each national television channel for three years after the data ended. The regressions tested four different functional forms for each television channel, and used the models with the highest R-squared. The projections found that the television channel with the largest market share is expected to enjoy continued growth at the expense of its three closest rivals. As a result, the HHI is also expected to stop decreasing and begin increasing instead. “Generally speaking, Croatian public TV channels will continue losing their audience, while the majority of other private TV channels will gain new audience” (p. 119). The authors conclude the Croatian television market has transitioned from monopoly to oligopoly because market concentration remains high even though the number of channels is not small. However, government-controlled channels are expected to continue losing market share as private channels gain larger audiences. Some channels, including the leading channel, are now owed by foreign interests. The authors argue that foreign “firms offer a global perspective and are not influenced by the government and offer programming that will deliver an eclectic view” (p. 122). JOURNAL OF MEDIA ECONOMICS 2016, VOL. 29, NO. 3, 108–110 http://dx.doi.org/10.1080/08997764.2016.1216217