2020 Volume 3 Issue 2 Pages 25-52
Similar to the audio-visual media service industry in other countries, Japan discussed about the vertical separation of broadcasting industry around 2010. To be separated or to be integrated, this is not a new question. What a factor to be considered is how to share and guarantee the risk of market performance of video content, which is the ultimate differentiated good, among vertical stakeholders. For its risk share, there are business practices that attach various options among vertical transactions when separated.
After the vertical separation and horizontal conversion, there are both easy layers and difficult layers from the view of promoting competition. The competitive landscape within each layer defines the bargaining power of private contracts in vertical transactions, affecting the connection contracts between layers and, consequently, social optimisation. There have been many policy debates regarding the connection between separated layers in each public utility sector until now, and it is necessary to consider layer separation and connection issues at the same time in the media industry field too. In the long run, dynamism, in which market competition itself forms layers autonomously, should be emphasized, and it is worthwhile that policies are conscious of forming the basis of dynamism.
