and the Long Tail Chapter 3 Revised for ed6 7716 Wild Ponies Making it in the music business without a recording contract Doug amp Telisha Williams perform as the band Wild Ponies Indie ID: 737602
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Slide1
The Media Business:Consolidation, Globalization, and the Long Tail
Chapter 3
Revised for ed6. 7/7/16Slide2
Wild Ponies: Making it in the music business without a recording contract
Doug & Telisha Williams perform as the band Wild Ponies.Indie musicians can make a middle-class living by engaging with listeners.
Kevin
Kelly’s Theory of 1,000 True
Fans
Digital
technology puts creative media power in hands of
individuals.Slide3
Development of Private Ownership1638: First printing press in North American colonies
1690: First newspaper published in colonies1830s: Penny Press begins1840s: Telegraph industry owned privately, not by government
1930s: Growth of national newsSlide4
Big MediaConsumers 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.Slide5
Legacy ConglomeratesDisneyNews Corp. & 21
st Century FoxTime WarnerViacom & CBS
Bertelsmann
All are multinational businessesSlide6
Disney2015 Revenue: $52.5
billionMajor 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
ESPNSlide7
News Corp. & 21st Century Fox
News Corp.Fiscal Year 2015 Sales:
$8.6
billion
Newspapers
, Information services, Books
21
st
Century Fox
Fiscal
Year 2015
Sales:
$29 billion
Cable
, Broadcast, Film, Satellite properties, includes Fox
NewsSlide8
News Corp. & 21st Century Fox
Both companies c
ontrolled by Rupert Murdoch and family.
Good at handling changing media environment.
Gives consumers what they want.
Big player on global level.Slide9
Time Warner2008 Sales: $47 billion, but lost $13.4 billion
2015 Sales: $28.1 billion, but profits of $3.8 billionLower Sales but higher profitability –
Why?
Improved profitability by selling off AOL and Time Warner Cable.Slide10
Time WarnerMajor player in film, television, cable, publishing, and online content.
Home of Scooby Doo, Harry Potter, Batman.Most recently made magazine division independent company.
Lessons of company downsizing:
1. Bigger isn’
t
always
better.
2. Concentrate your strengths on what you do
best.Slide11
Viacom & CBSCombined revenues: $27 billion (2015)
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.Slide12
Bertelsmann2015 Sales: $21 billion
Major player in publishing; also magazines and European broadcastingAdapting to changing music
business
Privately-held German
companySlide13
Big Media: The New PlayersNew companies
for new mediaRemember – there are no mainstream mediaSlide14
The New PlayersComcast/NBC UniversalAlphabet/Google
AppleSlide15
Comcast / NBC UniversalComcast had 2015 Sales of $74.5 billion – 25% bigger than Disney.
Major player in cable services, internet, phone services, cable networks, movies, and broadcast TV
NBC Universal
’
s biggest value is for cable channels.Slide16
Alphabet/Google2015 revenue of
$74.9 billion – Bigger than all the legacy media companies.Big asset is search, major source of revenue is highly targeted online
advertising
Automated aggregator of
newsSlide17
Apple
2015 Total revenue of $234 billion
$155 billion
from mobile phones (iPhone)
$23 billion
from
iPads
$30 billion
from music and video sales
$25 billion
from
conventional computer product
Apple has redefined
how we consume and
use mediaSlide18
Long Tail Media vs. Big Media (Short Head Media)
Long TailPortion of a distribution curve where a limited number of people are interested in buying a lot of different products.
Short Head
Portion of a distribution curve where a large number of people are interested in buying a limited number of products.Slide19
Long Tail vs. Short HeadSlide20
Characteristics of the Short Head
Relatively fewer goods and services offeredLarge potential market
Place
for big, popular media
products—hit
movies, TV shows,
musicSlide21
Characteristics of the Long TailHigh number of goods; more niche goods than
hitsLow cost of reaching markets
Ease of finding niche
productsSlide22
Characteristics of the Long TailFlattening 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.Slide23
Consequences of the Long TailDemocratization of the means of production
Democratization of the means of distributionGreatly 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 needsSlide24
Who Controls the Media?Owners
AdvertisersGovernment
Special Interest Groups
News Sources
Audiences