THE GUILD, THE DOMAIN, AND THE NICHE: COMPETITION BETWEEN INDUSTRIES

LEVEL 3: THE GUILD, THE DOMAIN, AND THE NICHE: COMPETITION BETWEEN INDUSTRIES

This level is about comparisons between industries. Although significant competition occurs within industries, competition also occurs between industries, especially when a new industry emerges. At this level the theory of the niche (Dimmick, 2003) provides conceptual and measurement tools to map competition within guilds and domains.

The Guild and the Domain Competition occurs among industries or populations of organizations within commu-

nities composed of members of many industries. Communities may be defined at many levels or geographic areas, which might be a country, a region of a country such as a state, or a market or metropolitan area. An industry is a population or group of organizations that shares many attributes in common, and the firms within the industry are more like each other than they are like firms in other industries. For example, a newspaper resembles other newspapers more than it resembles cable systems. Media industries can

be defined by their technologies (Dimmick, 2003), specifically their production technolo- gies. Although all the media in the future may be digitally distributed, their production technologies will continue to make each industry distinct and recognizable.

Within the industries that constitute communities, some sets of firms or organizations constitute guilds or domains, and it is within the guild or domain that competition may

be most intense. A guild is a group of industries that use a common resource such as advertising. Recall that competition is defined as taking place among firms or indus- tries that use the same or similar resources. Dimmick and Rothenbuhler (1984) used the term guild to characterize the set of media industries that depend on advertising, in whole or in part, for their survival. Dimmick (2003) used the term domain to describe

a set of media industries that serve the same or similar gratification utilities or that satisfy roughly the same consumer needs. The domains identified by Dimmick (2003) include the video entertainment media; the daily news media; business and economic news; and an interactive domain consisting of telephone, e-mail, and instant messag- ing. The gratification-utility domains are, not coincidentally, correspondent to content domains.

It is within the guild or the domain that competition may be at its most intense. The reason is fairly obvious. For the advertisers, the media firms that are members of the guild that depend on advertising constitute alternatives or potential substitutes for placement of messages (Dimmick, 2003). Similarly, to the consumer the content of the media that make up a domain are potential, if partial, substitutes. Similarly, within a domain the media are alternative means of spending time in pursuit of utility or gratification. Because the media within a guild or domain are at least partial substitutes, they are competitors.

DIMMICK

Competition, Guilds, and Domains Within domains one can speak of three ways in which competition is manifested: diffuse

competition, serial competition, and dominance. Later in this chapter the reader will see that competition is usually measured between each pair of industries within a guild or domain. However, it is also possible to conceptualize competition as the combined effect of the other members of a guild or domain on a focal industry. Ecologists such as Pianka (1983) have found that the combined but weaker competitive effect of a number of populations on a focal population can be equivalent to strong pairwise competition. This is called diffuse competition. If this is the case, one observable consequence might be a reduction in niche breadth (defined later in the chapter) in the focal population overtime. This reduction in niche breadth could occur without the invasion of the guild by new industries. The reduction in niche breadth is an outcome of competition.

A construct closely related to diffuse competition is the concept of serial competition. Serial competition occurs when a guild or domain is successively invaded by new industries over a long period of time. Dimmick (2003, p. 115) defined serial competitions as “the combined or cumulative effects of successive invasions on an older local population or populations.” As an example of serial competition, Dimmick (2003) found that the share of all U.S. advertising garnered by newspapers dropped steadily from 1935 through 2000, while the combined advertising share of industries that had invaded the guild during this time period (radio, TV, and cable) rose concomitantly. The reduction in newspapers’ share of advertising is a clear outcome of competition.

Dominance is the degree to which one industry in a guild is able to attain a commanding position in garnering a particular resource or resources. For example, on the time-spent- by-consumers dimension, television commands more of U.S. consumers’ leisure time than any other medium and is therefore dominant on this dimension. Dominant industries occupy their status as a result of superior competitive ability.

Dimmick (2003) used a version of the Simpson index as a measure of dominance in the advertising guild in the period 1935–2000 and found that whereas the newspaper was the dominant industry at the beginning of the period, the medium’s commanding position on the advertising dimension declined precipitously over the time period because of competition from newer media.

One unanswered question concerning dominance is an explanation of why it occurs. For example, if television were found to be dominant on the advertising dimension in the contemporary United States, is this because of a corresponding dominance on the consumer-time-spent dimension? If this question can be answered in the affirmative, is the dominance in consumer time spent with television related to the diversity of content available on the broadcast and cable channels as well as VCR and DVD?