Vertical Integration and Excess Capacity Investment Policies and Decisions by Swedish Regional Newspapers

Stefan Melesko

Journal of Media Economics, 2004, vol. 17, issue 4, 295-308

Abstract: The Swedish newspaper industry has adhered to a conventional wisdom to own and control its press production facilities based on the strategy of being a vertically integrated company. This approach has been considered an effective way to create barriers of entry and thus the perpetuation of monopolies. This ideology has been mostly supported by investment decision procedures. The result has been a continuous growth of excess capacity and decreasing profitability, instead of considering joint operations with other newspapers. A specific case is analyzed, and some dimensions of its failures are presented. Gradually, we may see the excess capacity question considered in a new light.

Date: 2004
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DOI: 10.1207/s15327736me1704_4

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