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4.4 What Political / Legal factors are likely to impact on the market?


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Kunnskapskilden – Internet Marketing Intelligence
Internet Situational Analysis of 1to1 Marketing/CRM


Research Project: Internet Situational Analysis of 1to1 Marketing/CRM  from Jan Vig  at Griffith University , Australia  1999/2000



Chapter 1 Introduction/overview

Chapter 2 Search Strategy

Chapter 3 One to One Marketing and its environment

Chapter 4 Environmental Scan

Chapter 5 Market analysis

Chapter 6 Competitors Analyses

Chapter 7 SWOT

Chapter 8 Critical Success factors

Chapter 9 Segmentation, Customer analysis and target markets

Chapter 10 Business Objectives and Strategies

Chapter 11 Marketing Mix tactics and Conclusions



Chapter 4

Environmental Scan


Chapter 4 Environmental Scan

4.1 General trend

4.2 What demographic trends / factors need to be considered?

4.2.1 Generally

4.2.2 Demographics and Internet

4.3 Economic and Business trends / factors

4.3.1 Generally

4.3.2 Internet and Economic and Business trends / factors

4.3. 4. Transactions

4.3.5 Daily Financial and Economic News Services

4.3.6 General Economic Demographics

4.3.7 Sample Economic Journals Online

4.3.8 Business Trends

4.4 What Political / Legal factors are likely to impact on the market?

4.4.1 Generally

4.4.2 Internet and E-commerce

4.4.3 Internet and Work force

4.4.4 Internet commerce, Legal and ethical issues, security and regulations

4.4.5 The Market Impact of New Media

4.5 Trade and International Issues

4.5.1 Generally

4.5.2 International Trade Newsgroups and Listservs

4.5.3 International Trade Sites

4.5.4 Trade and International Resources

4.6 What social / cultural trends / factors need to be considered?

4.6.1 Generally

4.6.2 Trends for the future

4.6.4 The trends which are undermining One to One Industry’s concept

4.6.5 Other Social trends

4.6.6 Workforce trend

4.7 What technological trends / developments need to be considered?

4.7.1 Generally

4.7.2 21st. Century trends(1)

4.7.3 21ST. Century trends (2)

4.7.4 Future Trends in Telecommunications

4.7.3 The Eight Critical Information TechnologyTrends

4.7.6 Internet and technology change

4.8 What environmental factors? (green environment)

4.8.1 Generally

4.8.2 Internet




What Political/ Legal Factors are likely to impact the market?


Research Project: Internet Situational Analysis of 1to1 Marketing/CRM  from Jan Vig  at Griffith University , Australia  1999/2000


4.4.1 Generally


Political decisions influence in a multiple way. Authorities in every market want to

  • protect companies from each other
  • protect consumers from unfair business practices and
  • protect the interests of society against unbridled business behavior



and their implications will continue to be an important factor in business. Since this area can not be predicted; organizations have to carefully adapt the necessary measures.


Political environments has a hold over other areas of this analysis because of the great effects of the USA’s and European decisions that have to do with laws, regulations and restrictions on the area of electronic communication.


Where to locate a business electronic commerce has become a critical factor in today’s global environment. The choice of jurisdiction affects economic, regulatory compliance, supply source, tax and many other elements. Companies that choose their locations wisely will have major price and competitive advantages over those that do not the footnote to the statement is that the tax rate in Anguilla is 0 percent.


Countries and industry organization around the world are studying international tax implications for electronic commerce, including the impact of tax haven countries on the potential drain of taxes.

We have to be aware that One to One Industry will have to translate the Web site contents into several languages and study the various processes needed to do business in foreign countries, including currency conversions and fulfillment services.


As a summary managers for this topic have to deal with issues such as :

  • system of government
  • political stability and continuity
  • ideological orientation
  • government involvement in business
  • government involvement in communications
  • attitudes towards foreign business and trade
  • national economic and developmental priorities


4.4.2 Internet and  E-commerce Generally


  • Deregulation and liberalisation
  • Electronic commerce and VAT


On July 1, 1997 President Clinton announced to the world the historical document «A Framework for Global Electronic Commerce» to the Internet users.


«One of the most significant uses of the Internet is in the world of commerce. Already it is possible to buy books and clothing, to obtain business advice, to purchase everything from gardening tools to high-tech telecommunications equipment over the Internet. This is just the beginning. Trade and commerce on the Internet are doubling or tripling every year — and in just a few years will be generating hundreds of billions of dollars in sales of goods and services. If we establish an environment in which electronic commerce can grow and flourish, then every computer can be a window open to every business, large and small, everywhere in the world.» – Excerpt from President W. Clinton’s message to Internet users.



The 5 key principles below are very important for us:

  1. The private sector should lead
  2. Governments should avoid undue restrictions on electronic commerce.
  3. Where governmental involvement is needed, its aim should be to support and enforce a predictable, minimalist, consistent, and simple legal environment for commerce.
  4. Governments should recognize the unique qualifications of the Internet
  5. Electronic commerce on the Internet should be facilitated on a global basis.


In a 1995 White Paper, Dr Alexander Cavalli wrote of E-Commerce:

«Electronic commerce is not a panacea for current business practices, nor is it a threat. It is a natural evolution of current business and technology trends. To be successful, however, electronic commerce must win the trust and acceptance of a wide range of companies and individuals.» – Excerpt from a white paper by: Dr. Alexander Cavalli,, the Vice President of Strategic Development at TradeWave. http://www.tradewave.com/products/whitpapr.html


In 1998, Great Plains Software develops products to enable e-commerce to flourish. This is part of the view of Lori Fett, the Internet & Tools Product Marketing Manager.

«The drive to a global, virtual economy is changing the way businesses operate and cooperate around the world. To survive and thrive, businesses need to look outside their traditional geographic boundaries, sales channels and business processes, adopting a forward-looking approach to business on the World Wide Web….» – Excerpt from Great Plains Software Web site written by Ms. Lori Fett, Internet and Tools Product Marketing Manager. http://www.gps.com/ebusiness/


Networking, electronic commerce, digitalization etc. are the kind of elements that influence today’s society’s behavior and development. The same elements and technology that creates the outward circumstances for these phenomena create a field where influential political decisions are made.


Undergoing changes in deregulation and liberalization of the European market in the area of broadcasting, media services, post, telecommunications and other utilities create new opportunities for EC, virtual business and on-line marketing.
Important questions have to do with, for example, digital-TV and its spreading, license fees, that have an effect in one way or the other on all business’ to do with electric communication. A good example comes from Britain, where BIB (British Interactive Broadcasting) has gotten 650 million pounds from the government for the spreading of set-top boxes. Also proposed global, non-VAT trade on the Internet would have, when come true, a huge impact on EC development.


Considering One to One Industry, these decisions influence indirectly through customer relationships. Therefore it is relatively important to know the direction of the political climate to be able to predict future policymaking and the effect it will have on One to One Industry’s business. Emerging digital economy series


E-Commerce June 22, 1999. Vice President Gore announces release of Emerging Digital Economy, 1999

New studies on the emerging digital economy and electronic commerce

The Emerging Digital Economy II, a new report from the Commerce Department, shows how information technology (IT) is transforming the American economy. Electronic commerce (business transactions on the Web) and the IT industries that make «e-commerce» possible are growing and changing at breathtaking speed, altering fundamentally the way Americans work, consume, communicate, and play. The report examines these developments and the role of IT industries as a driving force behind the nation’s remarkable record of sustained growth, low inflation, and high-wage job creation.


Download versions of these reports are also available athttp://www.ecommerce.gov  http://www.ntis.gov/yellowbk/1nty800.htmPossible to download in PSD format.



FACT SHEET: Americans Increasingly Use Internet Outside the Home


Falling through the net: Definining the digital divide, July 1999


This report on the telecommunications and information technology gap in America provides comprehensive data on the level of access by Americans to telephones, computers, and the Internet. It includes valuable information about where Americans are gaining access, what they are doing with their online connections, and provides trendline information since 1984.


According to the report, the number of Americans accessing the Internet has grown rapidly in the last year; yet, in the midst of this general expansion, the «digital divide» between information «haves» and «have nots» continues to widen.


  • 2% of Americans have Internet access from their homes, while 17.0% use the Internet outside the home. Nearly one-third (32.7%) use the Internet from any location (at home and/or outside the home.
  • People without home computers are almost 1.5 times more likely than home computer owners to obtain outside Internet access through public libraries or community centers.
  • More than half (56.3%) of Americans who use the Internet outside the home access it from work.
  • The second most popular point of access outside the home is the Kindergarten-12th grade school (21.8%).
  • For those accessing the Internet outside home, 8.2% of Americans use public libraries as an access point. 



Significant Findings:The data suggest that Americans without access to the Internet at home or at work are making use of public resources. By providing free access to computers and the Internet, community access centers have the ability to provide minority groups, lower income, and lesser educated persons with the same information tools as other connected Americans. As the number of community access centers across the country continues to grow and the prices for home computers decrease, more Americans will gain access to the Internet and participate fully in our digital society.





http://www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/usage.htmAmericans Using Internet for Many Taskshttp://www.ecommerce.gov/ede/report.html PDF The emerging digital economy

http://www.ntia.doc.gov/ntiahome/digitaldivide/ PDF 535 – Falling Through the Net: Defining the Digital



4.4.3 Internet and Work force



4.4.4 Internet commerce, Legal and ethical issues, security and regulations Addresses researched











Cookies http://www.webopedia.com/cookie.htm

The Electronic Frontiers Foundation (EFF) http://www.eff.org and http://www.eff.org/pub to view its FTP library.They also have publications.



Other Reference sites LAWE-Commerce legal aspects for the US http://www.brownbain.com/ecommerce.htmlAustralian E-commerce paper http://www.gtlaw.com.au/pubs/ecommnovelissues.html

Australian Government perspectives http://www.law.gov.au/ecommerce/legal.html

Gilbert and Tobin: Legal documents on E-Commerce related issues http://www.gtlaw.com.au/pubs/index_internet.html

UNCITRAL Model Law on Electronic Commerce http://www.un.or.at/uncitral/en-index.htm

Criminal Law and the Internet (US) http://cla.org/RuhBook/chp11.htm

US Internet Law Library http://law.house.gov/105.htm

«Criminal Law http://cla.org/RuhBook/chp11.htm  and The Internet ©» by Mark D. Rasch

‘The Copyright Page http://www.qantm.com.au/copyright/

 Who controls the Internet?


Legal matters with respect to the usage of the Internet did not become an issue at all until it spanned most of the globe and was used as a medium for commercial enterprise. Today, the Internet is accessed by people around the world in as many jurisdictions as there are governments for the countries and states that the people belong to. Each government has different departmental and functional structure and

places responsibility for control of Internet content and usage with the most appropriate local group.


With each different boundary of culture, religion and government there are potentially a different set of laws covering issues such as censorship, copyright, patents, trademarks, defamation, contracts, advertising, taxation and privacy. In order for there to be open global trade across jurisdictional boundaries there needs to be global agreement upon rules, policing and penalties for each of these issues for every Internet user’s benefit.


The United Nations with participation from the US, Europe and Australia has created the United Nations Commission on International Trade Law (UNCITRAL). One of the major developments of this commission is the UNCITRAL Model Law on Electronic Commerce. Several (128) countries are already adopting this model law and its arbitration rules to develop compatible international trade laws. Since the

arbitration rules were adopted by UNCITRAL in 1976 there was no hint at how important they might become with the advent of trade over the Internet in the 1990’s. The Legal Issues Censorship


Who is allowed to view what?


Offensive and abusive e-mail

Sexually Explicit material and pornography There are a number of programs that can be installed on a computer to restrict the material that can be accessed on the WWW.
See PEDINFO parental control of internet access http://www.uab.edu/pedinfo/control.html


Other sources:The cyberporn debate: http://www2000.ogsm.vanderbilt.edu/cyberporn.debate.cgiInternet censorship http://epic.org/free_speech/censorship

Technology and freedom http://www.freedomforum.org/technology/welcome.asp


Inappropriate business practices

This Web site has a comprehensive collection of information about spamming and ways to stop it is Julian Byrne’s site Get that spammer http://kryten.eng.monach.edu.au/gspam.html Intellectual property

Ideas and the proceeds from their development are resources that must be protected. Since 1990 much work has been done to legitimize the protection of ideas held and developed on computers and creative works displayed on the Internet as intellectual property.


«Laws for the protection of intellectual property provide for investment in innovation and the creation of such property. They provide this security firstly in the sense that they provide a protective barrier against third parties who seek to appropriate the work of the investor and take a free ride on the work. Without this barrier innovation is like a crop in an unfenced field, free to be grazed by competitors who have made no contribution to its cultivation.»  The Role of Intellectual Property in Innovation PMSEC, vol 2, pg 61, 7 June 1993.

Information policy : Copyright and intellectual property http://www.nlc-bnc.ca/ifla/II/cpyright.htmAmerican Committee for Interoperable Systems http://www.sun.com/ACIS/The American Intellectual Property Home Page  http://www.aipla.org

ARVIC: A Guide to Intellectual Property  http://www.arvic.com/

Intellectual Property Creators  http://www2.best.com/~ipc/

Thomas  http://thomas.loc.gov/



For further information see Appendix addresses and a brief explanation. Copyright


Copyright is applied to innovative and original material that is expressed in media such as print, paint, music, film and computer software. Copyright belongs to the creator of a work from the moment of its creation. There are international agreements that protect copyright holders in most jurisdictions. The details of copyright law change from country to country but in general the use of copyright material may be assigned freely of for money with limitations on usage or without at the owners disgression. In Australia Qantm maintains ‘The Copyright Page’ and is a great resource for copyright information relevant to the Internet.


Copyright basics http://lcweb.loc.gov/copyright/circs/circ1.htmlCopyright and Intellectual Property Resources  http://www.nlc-bnc.ca/ifla/II/cpyright.htmCopyright Office of the Library of Congress  http://lcWeb.loc.gov/copyright/

CyberSpace Law Center  http://www.cybersquirrel.com/clc/clcindex.html

Digital Copyright Protection and Watermarking Technology


10 Big Myths about Copyright  http://www.clari.net/brad/copymyths.html

CANCOPY  http://www.cancopy.com

Copyright.com  http://www.copyright.com

The Copyright Website  http://www.benedict.com/


Patents generally grant an inventor the right to exclude others from producing or using the inventor’s discovery or invention for a limited period of time. In the US, in order to be patented an invention must be novel, useful, and not of an obvious nature. Such «utility» patents are issued for four general types of inventions/discoveries: machines, man made products, compositions of matter, and processing methods. Changing technology has led to an ever expanding understanding of what constitutes a man made product.


In Australia the ‘Patents Act 1990 – Section 7’ states that an object must display ‘novelty’ and an ‘inventive step’ as compared to the existing ‘art base’ of the time.



European Patent Office  http://www.epo.co.at/epo/U.S. Patent and Trademark Office  http://uspto.gov/IBM Patent Server  http://www.ibm.com/patents/

The Inventors’ BookSource  http://www.webcom.com/aspen/ibc/02titles.html

Patent Portal  http://www.law.vill.edu/~rgruner/patport.htm

Searchable Directory of Inventions and Inventors  http://meddoc.gdb.org

Software Patent Institute  http://www.spi.org

MicroPatent’s Patent searcher (US) http://www.micpat.com Trademarks


The Australian Trademarks Act of 1995 defines Trade marks and trade mark rights: «A «trade mark» is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.»


All About Trademarks  http://www.ggmark.com/BrainWave Software  http://www.n2kbrainwave.com/McCutchen Online Intellectual Property and Trademark Law  http://www.mdbe.com/ip

Trade Secrets  http://execpc.com/~mhallign

Thomson& Thomson’s intellectual property resource center http://itp.thomson.com:2345/thomthom/resource.html  Electronic Payment and Internet Security Issues


Payment methods for online transactions must reflect the unique relationship between the buyer and the seller in Internet business. Paying for online purchases


Traditional payment methods involve the exchange of fixed value tokens for goods, services or information. Fixed value tokens might be cash (coins or notes) or cheques (personal, bank, postal order) which can be exchanged for cash and then other items of value. Variable value tokens include debit cards, credit cards and smart cards (SVC). Such tokens are not exchanged for goods, but the value stored in them may be transferred from one account to another as part of a business transaction.


The nature of credit card transactions make them ideal for online trading with immediate funds/goods transfer. The parts of the transaction that need care, are privacy of transaction details and authorization and authentication of card holder and merchant. Authentication may be done through digital certificate issued by a trusted third party like a government office or bank. Digital signatures may be used in place of physical signatures for mutual identification and authorization. Privacy is the province of encryption. All of these technologies are available today which is why online credit card transactions are the most popular method for purchasing items on the Internet.


Of course, not everyone has a credit card, so a serious online trader will offer alternative payment methods. Online financial transactions for online businesses


An Internet business can automate several areas of an online transaction. In many ways, setting up the transaction processing is the easiest part of getting a business onto the Internet. The hardest part, after defining your business goals, is finding out exactly what you have to do to achieve them. Here we will discuss the dealings that must be undertaken with financial institutions to allow online payment using a credit card. Payment by credit card


Before a credit card transaction can be initiated checks must be done to insure that the credit card holder has authority to buy goods on credit. Authorization checks involve assessing available credit, card validity and other factors.


American banks prefer to let third parties perform the credit transaction authorizations.

In Australia the following sites supply payment solutions: http://www.webfoundry.com.auhttp.//www.gil.com.au







Online payment in a nutshell

  • Get a credit card merchant account at a bank that supports online transactions (most do)
  • Develop CGI or forms input to take credit card and shopper details *** (Maybe third party)
  • Get credit checking card and validation software or service provided by a bank or third party (ABA)
  • Get online banking to process credit card transactions. Secure Electronic Transactions – The SET protocol


Basic security measures that are taken for the transmission of credit card authorization data involve the encryption of card and authorization response details. Encryption may be implemented using routines built into the communication applications used by the authorization software. Alternatively, it may be implemented using Secure Sockets Layer (SSL) technology built into standard browser software and the server application program.


Ideally, a secure electronic transaction should be:

  • private
  • tamper resistant
  • able to positively identify each party in the transaction.


Encryption used properly might ensure privacy and tamper resistance yet it does nothing to identify parties to the transaction.


The SET protocols are described in a white paper written by Applied Communications, Inc.


The MasterCard site describes the technologies and the goals of the SET protocols.


The Visa site describes SET technology and how a shopper may utilise it to ensure secure online transactions. Smartcards, smart-tokens and e-currency


Smartcards, smart-tokens and e-currency are all means of storing value for later exchange. Stored value cards are used in many areas of commerce. The electronic bus ticket issued by payment of cash to a card dispenser stores enough value to be traded for a number of bus trips. Phone cards have a fixed value which may be reduced in exchange for making telephone calls. Simple stored value cards might store

identification information in a barcode. Slightly more complex systems have a magnetic stripe, the information on which can be read and updated as needed by an appropriate reader.


The most complex stored value devices are smartcards and smart-tokens. Both of these devices contain memory and a small microprocessor that can be used to implement a number of tasks. Once a smartcard or token is placed into a reader, power is supplied to the chip which can then be used to identify the user, authenticate a transaction, encrypt information and update and retrieve data that is stored in its memory.


E-currency works a little differently, in that there is no personally carried physical device used for storage of information or value. With the help of a financial institution the e-currency user must first set up an electronic wallet and transfer funds from another account into the e-wallet’. Transactions are accomplished by exchanging electronic tokens for goods. The bank is involved in the transaction to verify the value of the tokens being traded. An electronic token has the information equivalent of a cheque with digital signature in encrypted form.


There are a few sources of e-currency around the world. Digi-cash, based in Holland has been used successfully since mid-1994. Advance Bank in Australia has been issuing Digi-cash since 1997. Other schemes represent electronic versions of either cash, cheques or credit cards

with appropriate protocols for processing. An excellent resource for finding out about electronic currency types is the World Wide Web Consortium (W3C) pages on e-commerce.


My Card’s Smarter Than Your Card

October 14, 1999

Although Europe was first to embrace the «smart card» (See INSIDE 1to1, Jan. 23, 1997), it looks like the rest of the world isn’t far behind now. Visa predicts that within 10 years, all of its cards worldwide will be smart cards. In the U.S. alone, smart-card usage is expected to rise 60 percent over the coming year. First USA plans to issue more than 1 million smart cards in the San Francisco Bay area and it’s hoped that the card will rival American Express Company’s Blue card, a brand new card designed to make Internet shopping more secure for consumers. Smart cards are also on the launch pad for the business- to-business world. MasterCard is planning smart cards that will not only facilitate business-to-business

e-commerce, but control access to a company’s internal network as well. American Express is in discussions with Microsoft to launch a corporate smart card of its own. Like Blue, the new smart cards will use digital certificates to identify cardholders on the Web, but these cardholders will mainly consist of employees and students. In addition to allowing for more secure e-commerce, the new cards will also control access to a company’s internal networks and buildings. Digital security


There are four basic objectives of information security:

  • Confidentiality – Making sure that information is not disclosed to unauthorized persons.
  • Integrity – Ensuring information is consistent by preventing unauthorized creation, alteration or destruction of data.
  • Availability – Making sure that authorized users are not denied access to information and resources.
  • Legitimate use – Making sure that resources are not used by unauthorized persons in unauthorized ways.


To maintain some sort of level of security an organization must place into operation a security policy for its domain. The domain is usually a system of computers and networks belonging to the organization. The security policy helps with the allocation of rights to people that come into contact with the system for various reasons. Proper authorization establishes who may do what to which of the organization’s resources.



Security policy covers several aspects of access to resources.

  • Physical security – has to do with locks and keys, guards and other access control mechanisms
  • Personnel security – covers employee screening, identification of sensitivity of position, security education and awareness.
  • Administrative security – control of foreign software, investigation of security breaches, review of accountability.
  • Media security – ensuring that media are identified indelibly and that old media with sensitive data are destroyed.


Safeguards placed to maintain security are often referred to as security services. From an e-commerce point of view the important security services are those that ensure confidentiality of transmitted data, integrity of transmitted data and non-repudiation of transactions.


Some extensive resources for information about electronic privacy:Readings on encryption and national security http://www-swiss.ai.mit.edu/6095/readings-crypto.htmlReadings on privacy implications of computer networks :

EPIC Online guide to privacy resources http://www.epic.org/privacy/privacy_resources_faq.html

The privacy page http://www.2020tech.com/maildrop/privacy.html



Confidentiality (or privacy) is ensured through the use of encryption. Encryption is used to scramble information, originally in plaintext so that only a person with the correct decryption key can unscramble it again. This ensures that unauthorized persons viewing the contents of network packets cannot decypher the original plaintext contents.




To read more about PGP (Pretty Good Privacy) take a look at one or more of these.

Peter’s PGP page http://www.gildea.com/pgp

FAQ alt.security.pgp ftp://rtfm.mit.edu/pub/usenet-by-hierarchy/news/answers/pgp-faq

Where to get the pretty good privacy program (PGP) FAQ http://www.cryptography.org/getpgp.htm Authentication


By encrypting a message with a private key the sender can be authenticated (identified) as only the matching public key associated with that person’s name can decypher the contents of the message. Similarly, if it is important that a message is only received by one particular person then encryption with the public key will ensure that only the holder of the private key can read the message.


Digital signatures use a signatory’s private key to encrypt predetermined sections of a message. Only the matching public key will decypher the encoded parts, effectively identifying the author of that message. Third parties may be called in to take part in a transaction such as a credit transfer for goods or services. If the party is «trusted» (governments, banks, universities (dont laugh)) it can issue a certificate that can be used to authenticate the transaction. The certificate will be a token with appropriate information on it identifying the transaction, that is digitally signed by the first and third parties. Non-repudiation


Trust is a commodity that can only be conferred by another trusted party. What transpires is a hierarchy or network of trusted parties that may be used to identify participants and confirm authenticity of transaction details. Digital signatures and certifications of authenticity are the only methods available for the identification of parties to a digital (online) transaction. Without identification one or more parties may repudiate the transaction or communication by denying its occurrence or ever taking part in it. Non-repudiation is a most valuable service for ensuring the completion of credit card transactions on the Internet.


4.4.5 The Market Impact of New Media


Media operators have been busy lobbying Government about the potential demise of their main stream media at the hands of the new media. Speculation has been particularly rife regarding the likely impact (and hence appropriate regulation) of Digital TV, Datacasting and, by association, the Internet.


There is little historic evidence to suggest that new media will result in old media disappearing. The invention of radio did not result in the disappearance of newspapers; the invention of TV did not result in the disappearance of radio or cinema. Similarly the launches of the Internet and Pay TV have not resulted in the disappearance of any mainstream media and are unlikely to in the foreseeable future.



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