Mobile internet 3.1 CHANGING MARKET STRUCTURES IN THE CONVERGING MEDIA AND ENTERTAINMENT AND MOBILE WIRELESS TELECOMMUNICATIONS INDUSTRIES The rules of competition that determine an industry's attractiveness and influence a firm,s competitive strategy are embodied in five competitive forces. The entry of new competitors, the threat of substitutes, the bargaining power of buyers and of suppliers, and the rivalry among the existing competitors determine a firms profitability. The strength of these five competitive forces can change as an indu try evolves Table 1: The Mobile Internet influences the Media Industry's Structure A()2.5G services are potentially sufficient, 4G services are on the horizon Products or servic ()New distribution platforms complement onal media markets by serving different needs Bargaining Power competitors End-Users industry enter the mobile wirele (- (+)Raises bargaining power over (+)Competitors from the media (+)Attention telecommunications industry (+)Access to mobile consumers through ower to end a carrier each end user intermediating companies ()Strong intra-medial competition (+) Lack of licenses to media content Barriers to Entry (+) Strong brand identities of established As the mobile Internet develops, the industry structure of the media and enter- tainment industry turns into a relationship of co-opetition with wireless operators Rivalry among competitors extends from the competition among pure media com- panies to the competition among players in the converging telecommunications and media industries. Media companies gain in bargaining power, because con- tent is suggested to be a main driver of the adoption of mobile communication services in the business-to-consumer (B2C)sector With the option to establish mobile virtual network operators (MVNOs ) media companies can use their core assets and enter the wireless telecommunications market. From the point of view of wireless operators, the emergence of new play ers such as MVNOs will be even more crucial, if MVNOs such as media compa- nies or Internet denovo companies, e.g. portals like Yahoo! 29, establish strategic 28 See Porter(1998). sbr54(42002) 3593.1 CHANGING MARKET STRUCTURES IN THE CONVERGING MEDIA AND ENTERTAINMENT AND MOBILE WIRELESS TELECOMMUNICATIONS INDUSTRIES The rules of competition that determine an industry’s attractiveness and influence a firm’s competitive strategy are embodied in five competitive forces 28. The entry of new competitors, the threat of substitutes, the bargaining power of buyers and of suppliers, and the rivalry among the existing competitors determine a firm’s profitability. The strength of these five competitive forces can change as an indus￾try evolves. Mobile Internet sbr 54 (4/2002) 359 28 See Porter (1998). 29 See Bughin/Lind/Stenius/Wilshire (2001). Rivalry among existing competitors Bargaining Power of Suppliers Buyers Bargaining Power of Channels Bargaining Power of End-Users Barriers to Entry Threat of Substitute Products or Services Adapted from: Porter (2001), p. 67 Competitors from the mobile wireless telecommunications industry enter the media industry (+) Access to mobile consumers through a carrier (+) By adding another distribution platform, media markets could be expanded, but serve different needs (+) 2.5G services are potentially sufficient, 4G services are on the horizon (-) (+) Lack of licenses to media content Strong brand identities of established brands (+) Raises bargaining power over licenses (+) The mobile Internet provides a channel for production companies to reach end users, reducing the leverage of intervening companies (+) Attention economy shifts bargaining power to end consumers (-) Binding contracts Telecoms’ (+) portals are dependent on content (-) (-) Strong intra-medial competition Table 1: The Mobile Internet influences the Media Industry’s Structure As the mobile Internet develops, the industry structure of the media and enter￾tainment industry turns into a relationship of co-opetition with wireless operators. Rivalry among competitors extends from the competition among pure media com￾panies to the competition among players in the converging telecommunications and media industries. Media companies gain in bargaining power, because con￾tent is suggested to be a main driver of the adoption of mobile communication services in the business-to-consumer (B2C) sector. With the option to establish mobile virtual network operators (MVNOs) media companies can use their core assets and enter the wireless telecommunications market. From the point of view of wireless operators, the emergence of new play￾ers such as MVNOs will be even more crucial, if MVNOs such as media compa￾nies or Internet denovo companies, e.g. portals like Yahoo! 29, establish strategic reducing the leverage of intermediating companies Strong intra-medial competition Competitors from the media industry enter the mobile wireless telecommunications industry New distribution platforms complement rather than substitute traditional media markets by serving different needs