Chp. 3: Media Business Flashcards

1
Q

Development of Private Ownership

A

•1638: first printing press in North American colonies•1690: first newspaper published in colonies•1830s: Penny Press begins•1840s: telegraph industry owned privately, not by government•1930s: growth of national news

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2
Q

Big Media

A

•Consumers have many more ways to consume media now than they did 40 years ago•Old media expanded while new media come into existence•Limited number of giant media conglomerates, but also new big players•But today, bigger isn’t always better

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3
Q

Legacy Conglomerates

A
  • Disney
  • News Corp. and 21st Century Fox
  • Time Warner
  • Viacom &CBS
  • Bertelsmann
  • All are multinational businesses
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4
Q

Disney

A
  • 2016 revenue: $55.6 billion
  • Major player in broadcast TV, cable, movies, theme parks
  • Home of Mickey Mouse, Pixar, Marvel & Lucasfilm
  • Pioneer in new media distribution and media convergence; among the first to offer content through Apple’s iTunes
  • Master of merchandising and product tie-ins
  • But has to deal with declining audiences for money-maker ESPN
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5
Q

News Corp. and 21st Century Fox

A
  • News Corp.–Fiscal year 2015 sales: $8.1 billion–Newspapers, Information services, Books
  • 21st Century Fox–Fiscal year 2015 sales: $28.5 billion–Cable, broadcast, film, satellite properties, includes Fox News–Many of entertainment properties being sold to Disney
  • 2008 sales: $47 billion, but lost $13.4 billion
  • 2015 sales: $28.1 billion, but profits of $3.8 billion•Lower sales but higher profitability – why?
  • Improved profitability by selling off AOL and Time Warner Cable
  • Acquired by AT&T in 2018
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6
Q

Time Warner (Now Warner Media)

A

•Major player in film, television, cable, publishing, and online content
•Home of Scooby Doo, Harry Potter, Batman
•Most recently sold off magazine division
•Lessons of company downsizing:
–Bigger isn’t always better
–Concentrate your strengths on what you do best

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7
Q

Viacom and CBS

A
  • Combined revenues: $25.6 billion (2016)
  • Major player in broadcast television, cable, and movies
  • Home of MTV Networks (MTV, VH1, Nickelodeon), CBS, CW, and Paramount
  • CBS owned Viacom; then Viacom owned CBS; now separate companies for financial reasons
  • Battles over management, merging companies together again
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8
Q

Bertelsmann

A
  • 2015 sales: $20.4 billion
  • Major player in publishing; also magazines and European broadcasting
  • Adapting to changing music business
  • Privately-held German company
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9
Q

Big Media: The New Players

A
•New companies for new media
–Comcast/NBC Universal
–Alphabet/Google
–Apple
•Remember – there are no mainstream media
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10
Q

Comcast / NBC Universal

A
  • Comcast had 2016 sales of $80.4 billion – up 12 billion from 2014
  • Major player in cable services, internet, phone services, cable networks, movies, and broadcast TV
  • NBC Universal’s biggest value is for cable channels
  • Competed with Disney for 21st Century Fox entertainment properties
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11
Q

Alphabet/Google

A
  • 2016 revenue of $90.3 billion – bigger than all the legacy media companies
  • Big asset is search, major source of revenue is highly targeted online advertising
  • Automated aggregator of news
  • Google is biggest part, but wide range of high-tech businesses•Income from around the world
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12
Q

Apple

A

•2016 total revenue of $216 billion
–$137 billion from mobile phones (iPhone)
–$21 billion from iPads
–$35 billion from music, videos, apps and other
–$25 billion from conventional computer product
•Apple has redefined how we consume and use media

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13
Q

Long Tail Media vs. Big Media (Short Head Media)

A
  • Long tailPortion of a distribution curve where a limited number of people are interested in buying a lot of different products
  • Short headPortion of a distribution curve where a large number of people are interested in buying a limited number of products
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14
Q

Characteristics of the Short Head

A
  • Relatively fewer goods and services offered
  • Large potential market
  • Place for big, popular media products – hit movies, TV shows, music
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15
Q

Characteristics of the Long Tail

A
  • High number of goods; more niche goods than hits
  • Low cost of reaching markets
  • Ease of finding niche products
  • Flattening of the demand curve for mainstream hits; choice lowers demand for hits
  • Size of collective market; collection of niche products can be as big as hits
  • Tailoring to personal tastes; consumers want content that fits their own wants and needs
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16
Q

Consequences of the Long Tail

A
  • Democratization of the means of production
  • Democratization of the means of distribution
  • Greatly reduced cost of connecting suppliers and consumers
  • Relatively small number of consumers demanding a large number of goods and services, often tailored specifically to their needs