Digital Convergence and its Consequences

AbstractThe concept of convergence has been bandied about for at least 25 years. Initially, concepts of convergence conflated technological integration of print, telecommunications and broadcasting systems with firm-level integration of publishers, telephone companies, cable TV operators, and broadcasters. Ithiel de Sola Pool’s (1983) concept of a single integrated common carrier that met all media needs exemplified the prevailing vision. This paper conducts a broad historical survey of the market structure of media and telecommunications industries from the analogue era of the 1940s to the late-1990s. Its chief premise is that convergence is driven by the declining cost of information processing power, and by the development of open standards. The chief effect of this upon market structure is not to encourage consolidation and vertical integration but rather to break up the media market into more or less specialised horizontal components (content, conveyance, packaging of services, software, and terminal...