The TCA conducted a TV broadcasting sector study and identified main competition problems in the Report in March 2017. Below we provide highlights of the main competition concerns that arise from the recent technological developments, including increasing usage of the IP-based networks, digitization of the content, and 3G/4G technologies. The Report would be of a particular interest for the TV broadcasting sector operators.
Competition Concerns in General
Entry Barriers. Some of the traditional entry barriers of the TV broadcasting sector include, among others, (i) policy implementations of the regulatory authorities that restricts the entrance due to economic, cultural and social factors; (ii) non-transparency of the rules that regulate the entry conditions; (iii) high capital requirement; and (iv) good relations between the dominant firms and the consumers and advertisers. Following the recent trends and technological developments, those entry barriers were reshaped. Due to technology, the cost of information transmission and reproduction has decreased. Further, digitization has gone away with the frequency shortage. These developments loosen the market entry barriers in terms of cost, consequently increasing a number of players but remaining the content at the same level.
Popular contents, such as sports competitions and series, are likely to be provided by Pay TVs, which have to provide unique content in order to attract customers. These developments lead to a content shortage in the TV broadcasting sector. Further, the control on the access services through satellites is likely to source the market power over the broadcasting networks. Therefore, technologic developments will not completely eradicate the concerns on the transmission shortage.
Vertical Consolidation. One of the most serious competition concerns in the broadcasting sector is the vertical consolidation. According to the OECD, the chain of broadcasting, production and distribution can be categorized as content/program production, content/program bundling, wholesale distribution and retail distribution.
Concerns Specific to Turkey
TV broadcasts are made through analogue terrestrial, satellite, cable, and broadband Internet technologies. The concerns are mainly attached to the broadcasts through analogue terrestrial. That is to say, the shortage in frequencies may constitute a market entry barrier. Currently, the capacity can carry up to 24 national and 17 regional channels. In terms of the broadcasts through satellites, due to the sole choice of Turksat, the competition in the transmission is not enough to create an efficient market. Further, the broadcasts through cable are geographically very limited. In order to increase competition, significant investments throughout Turkey are required. In terms of the broadband internet technologies, Turkey appears to be among the developed countries as to the usage per person. However, the market penetration activities fall behind the OECD countries, which pose a barrier for the quality and efficiency.
Further, market share of the Pay TVs are sustainably increasing in Turkey. However, despite such increase, Pay TV services’ penetration is significantly low, especially compared with the developed countries. This is mostly due to Turkish consumer trends and the availability of the open TV channels through analogue terrestrial broadcasts and satellites. This situation is a result of the socio-economic condition of the consumers as well as the availability of the pirated content.
Another important finding is on the right of broadcasting of the football matches in Turkey. The Report has found that although Turkish Football Federation has the right to regulate how to sell/distribute the right of broadcasting, this does not prevent the Turkish Competition Authority to have jurisdiction over the market. The Report further states that currently the said market is highly uncompetitive and certain improvements should be made, such as distributing the right of broadcasting of the football matches between at least two different undertakings that use two different platforms.
In conclusion, we expect that the TCA would activate its work in relation to TV broadcasting sector, where it has already identified several competition concerns according to the Report.
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