What does it take to survive in a digital world? Resource-based theory and strategic change in the TV industry

Traditional linear television has been a long-standing success story. However, the digital revolution is rapidly transforming the TV industry, in terms of production, distribution, and consumption. New market opportunities are attracting competitors from outside the industry, and incumbent TV companies must evolve in order to stay competitive and survive in a new digital world. Taking an institutional perspective, the authors develop a conceptual framework that identifies four strategic diversification options which TV firms can pursue to transform their traditional business synergistically: (1) remain a linear-only TV company; (2) combine the linear offering with advertising-based video-on-demand services; (3) combine the linear offering with subscription-based video-on-demand services, or (4) combine the linear offering with both kinds of video-on-demand services. Building on resource-based theory, the authors examine which sets of market-oriented and internal strategic resources are necessary for each strategic option. Specifically, they highlight the value propositions that linear TV can still offer in the digital age, and how TV companies can create unique advantages by leveraging synergies between linear and video-on-demand services. The authors provide guidelines for TV companies to manage the organizational transition and propose an agenda for future academic research.