Finally, economies of scale occur through vertical integration; how do cable operators benefit from vertical integration?

This is for a Journalism Economics class.

How does the dual market work for cable-network owners? (If you’re not sure what a cable-operator is, go here… http://en.wikipedia.org/wiki/Cable_television). Also, how does the Internet threaten the cable-operator’s dual market? Finally, economies of scale occur through vertical integration; how do cable operators benefit from vertical integration?

Please don’t forget to mention primary and secondary market.
(Shapiro and Varian’s book, Information Rules, could help since we use this book for class)

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