Springer-ProSiebenSat.1-Merger
13
the preferred target group of individuals between the ages of 14-49. Consequently,
the most attractive content is then broadcasted. Due to this preference for the prime
time period, firms demanding advertising capacities are willing to pay a higher price
per contact (or per thousand contacts as it is commonly standardized). The preference
for greater audience and the higher willingness to pay can also be recognized by com-
paring the prices per thousand contacts of the minor stations (e.g. Vox, Kabel 1) with
those of the main stations of each group (e.g. RTL, Sat.1). Interestingly, the prices of
the public stations reach a level significantly above those of the most attractive pri-
vate stations13, which is not discussed by the cartel office.
Nevertheless, the striking convergence of prices during the 1990s and a simultaneous
anouncement of price increase (justified by almost identical wording) led to earlier
investigations by the Bundeskartellamt in 1999 (KEK 2000: 206). This indication of
past experience with anticompetitive conduct strengthens the case of the competition
agency. However, at the same time, there are great incentives to break a collusion.
Because TV stations face a cost structure characterized by a great share of fixed costs
for programming and very small marginal costs for advertisement booking, the sta-
tions are interested in using their full capacity. Therefore, the incentive to cut prices
at short notice and thereby break the cartel agreement is comparatively high. The in-
centives for cheating are also supported by practices to allow ex post discounts
(Kruse 2000: 40). As a consequence, the observed simultaneous movements of prices
may also be a case of justified parallel behaviour (Rott 2003: 250). Another neglected
issue is whether the noted parallel development of audience market shares
(Bundeskartellamt 2006: 33) might cause (justify) a parallel development of advertis-
ing market shares.
Furthermore, competitive actions concerning programming should be taken into ac-
count. As the Bundeskartellamt (2006: 23) declares there is no separate ‘market’ for
audiences but there is a strong link between the two because the successs on the ad-
vertising market is determined by the audience shares. And in fact the program con-
tent is maybe the most important means a station can adapt to influence not only its
audience level and share but also its advertising revenues. It happens frequently that
shows not fulfilling expectations are stopped or moved to time periods with generally
less audience. Beyond that, sequences of innovation and imitation can be observed as
well. So, on closer examination the competitive situation may be more differentiated
than illustrated by a glance at advertising market shares and average prices.
Secondly, the issue of entry barriers deserves a closer look. The Bundeskartellamt
(2006: 36-37) is certainly right to conclude that the other competitors on the TV ad-
vertising market are currently not able to exert sufficient competitive pressure on the
duopolists. This includes the mighty public stations since they are not allowed to
broadcast advertisement spots beyond the time frame from 5 to 8 p.m. on weekdays.
13
While the public stations must not broadcast commercials after 8 p.m., they legally engage in pro-
gram sponsorship, for instance “company X presents the movie Y”.