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Media Moguls and Megacorps: Today and Tomorrow

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Lecture on the structure of Traditional Media and Entertainment Industry. U.S. Centric, emphasis on the Moguls and their strategies in light of digital/Internet challenges worldwide.

Lecture on the structure of Traditional Media and Entertainment Industry. U.S. Centric, emphasis on the Moguls and their strategies in light of digital/Internet challenges worldwide.

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  • 1. Media Moguls and Mega-Corps Who will the giants be tomorrow? Stuart W. Volkow svolkow@ucla.edu www.stuartvolkow.com Stuart W. Volkow 1
  • 2. The Multichannel Mediaverse Has Created Unlimited Consumer Choice 600 Internet Connected TV 450Channels Rise of Cable Decline of Broadcast 300 Networks MSOs begin multi- 150 billion dollar builds Free TV Over-the-air 0 1970 1980 1990 2000 2010 Stuart W. Volkow 2
  • 3. 3
  • 4. $13.4B NASDAQ:CMSCA$30.9 B / 24 mm subs Viacom (NYSE:VIA) Disney ABC $14B CBS Corp.Time Warner (NYSE:CBS) (TWX) $28.6 B News Corp (NYSE:NWS) Copyright 2009 Stuart Wayne Volkow 4
  • 5. Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 5
  • 6. Private Media / Entertainment CompaniesCopyright 2009 Stuart Wayne Volkow. Xtropia Partners 6
  • 7. U.S. TV Business Structure • Broadcast Networks (“free” TV) • Pay Television – CATV Networks – DBS Networks • Owned and Operated Independent Stations – Affiliate Stations – Station Groups • Studios, ConglomeratesCopyright 2008, Stuart W. Volkow TV Reborn 7 7
  • 8. There are 1600 T V Broadcasters Licensed in the USACopyright 2008, Stuart W. Volkow TV Reborn 8
  • 9. The US Broadcast NetworksCopyright 2008, Stuart W. Volkow TV Reborn 9 9
  • 10. Station GroupsScripps (SSP) 10 Stations plus HGTV, DIY, FOOD, Fine LivingCBS Television Stations (28 stations, 16 affiliates)Hearst Argyle TV (HTV) 25 StationsTribune Media (TRB) 21 StationsClear Channel Communications (CCU) 41 TV Stations, 1,182 Radio Stations)  Acquired by Thomas H. Lee Partners for $26.7 Billion USD Stuart W. Volkow 10
  • 11. Copyright 2008, Stuart W. Volkow TV Reborn 11 11
  • 12. Telecomunications Technologies Reference, Bradley Dunsmore,Toby Skandier, Ciscopress.comCopyright 2008, Stuart W. Volkow TV Reborn 12 12
  • 13. Telecomunications Technologies Reference, BradleyDunsmore, Toby Skandier, Ciscopress.comCopyright 2008, Stuart W. Volkow TV Reborn 13 13
  • 14. Copyright 2008, Stuart W. Volkow TV Reborn 14 14
  • 15. US Pay TV Landscape Landscape all numbers in millions Subs % TV/Internet Comcast (CMCSA) 24 / 16 22 DirecTV (DTV) 18.3 17 DISH (DISH) 14 14 Time Warner (TWC) 14 / 9 12 Cox 5.9 Charter (CHTRQ) 5.7 Verizon 3.2 Cablevision (CVC) 3 AT&T 2.7 Total Pay TV Subs USA 103 ApproxCopyright 2008, Stuart W. Volkow TV Reborn 15 15
  • 16. Pay TV = Dual, Triple Income Streams ‣US CATV Revenue ‣$86 Billion USD ‣$26 Billion USD in Advertising ‣Source: NCTA.comCopyright 2008, Stuart W. Volkow TV Reborn 16 16
  • 17. Triple PlayCopyright 2008, Stuart W. Volkow TV Reborn 17 17
  • 18. Copyright 2008, Stuart W. Volkow TV Reborn 18 18
  • 19. 52 million CATV Subs Largest MSOs >80% subsCopyright 2008, Stuart W. Volkow TV Reborn 19 19
  • 20. DBS 32 million subsCopyright 2008, Stuart W. Volkow TV Reborn 20 20
  • 21. Dish Network (NASDAQ:DISH.O) $11.6 B •13.8 Million Subs $9.6 B •250 Channels •30 Premium Channels •140 Foreign Language Channels Echostar (NASDAQ:SATS) $1.5 B •STB Business •Satellite Ops (85 Degree Orbital) •300 MPEG IV channels capacity •Fiber •SLING Media •140 Foreign Language Channels •$20.3 million invested in CINEMANOW.com in ‘06 Stuart W. Volkow 21
  • 22. DirecTV Group (NASDAQ:DTV) $21.5 B $36 B •16.8 million subs •13 million Internet subs •190 National Channels •1400 Local Digital Channels •90 HD Channels Stuart W. Volkow 22
  • 23. Te l c o sCopyright 2008, Stuart W. Volkow TV Reborn 23 23
  • 24. 113 B 165 B 95.5 Million Wireless Subs at an avg of $62/m 2.3 million U- verse subsStuart Wayne Volkow, Copyright 2009 24 24
  • 25. GE- NBC UNIV NYSE:GE✦ Universal Studio Facility: production, distribution, facilities, finance✦ Universal Studios✦ NBC Television Network✦ USA Network✦ CNBC✦ SyFy Channel✦ MSNBC✦ Bravo Stuart W. Volkow 25
  • 26. NBC Universal, digital NBCU is paying about $6 million for a 35% stake in DriverTV, which has about $8 million in annual revenue, according to people familiar with the matter. Currently all DriverTVs ad revenue comes from car makers, but the company, which is partly owned by the TV- and ad-production firm Radical Media, is hoping eventually to attract advertisers from other auto-related industries such as insurance. With NewsCorp and $100 million for 10% from $21 billion sized Providence Equity Partners Stuart W. Volkow 26
  • 27. Comcast (NASDAQ:CMSCA) $35.7 B $65.3 B 27 Stuart W. Volkow 27
  • 28. Likely to acquire NBC UNI for assets and cash estimated at $6 billion to $7 billion Brian L. Roberts, CEO Comcast Jeffery R. Immelt, CEO Chair GECopyright 2008, Stuart W. Volkow TV Reborn 28 28
  • 29. 29Stuart W. Volkow 29
  • 30. •Other Interests: •MGM (with Sony) •iN Demand •FEARnet •Music Choice•Content •CATV •VERSUS •24 million subs •G4 •13 million Internet subs •E! •4.6 million Phone subs •Golf Channel •250 Digital Channels •Style •>10,000 VOD programs 30
  • 31. Time Warner Cable $18 B $24 B 31
  • 32. CBS Corp.(NYSE:CBS) $14B $13BSumner Redstone Leslie MoonvesExec Chair of Board Exec Chair of Board Stuart W. Volkow 32
  • 33. CBS Corp.(NYSE:CBS) $14B Sumner Redstone, CEO  CBS Television Stations (29)  The CW (with TWX)  CBS Radio (140 stations)  Showtime: Smithsonian, TMC Stuart W. Volkow 33
  • 34. CBS Interactive Units CNET Last.FM Gamespot.com CBSSports.com March 12, 2009 (Bloomberg) -- CBS Corp.s Webcast of the U.S. national college basketball tournament will produce as much as $25 million in ad sales, more than double last years tally. (= Superbowl pregame show) Stuart W. Volkow 34
  • 35. Viacom (NYSE:VIA) $13.4B $26 B Paramount Pictures  SPIKE  Dreamworks  CMT  Marvel  MTV, VH1  Distro  TV Land Paramount Vantage  Noggin MTV Films  Nickelodeon Nickelodeon Movies  TMC The CW  LOGO UPN  The N MTV Networks, MTV2  FLIX Virtual Worlds (VLB)  Sundance VH1  Comedy Rhapsody Stuart W. Volkow Central 35
  • 36. Viacom Interactive UnitsRhapsody JV between MTV and REAL NetworksAtom FilmsMTV Virtual WorldsXfire.com (7 million HHs)Shockwave.com Stuart W. Volkow 36
  • 37. Viacoms billionaire owner wants to know whosbadmouthing his girl-band pet project to The Daily Beast.And he offered to make Peter Lauria “well-rewarded” ifhe fessed up. HEAR THE TAPE. http://www.myspace.com/electricbarbarellas 37
  • 38. Disney ABCDisney Studio Facility: production,distribution, facilities, finance Walt Disney WorldDisney Studios ResortWalt Disney Television Magic KingdomTouchstone EpcotABC Family ChannelFox Kids Europe, Latin America Disney’s AnimalABC TV Network KingdomABC Radio Network DisneylandBuena Vista Television AnaheimMiramax Film Corp.Hearst Communications Tokyo DisneylandESPN ResortESPN Classic Disneyland ParisESPNEWS Disney Cruise LineDisney Channel Disney StoresE! Entertainment Television (part Robert A. Igerowned) President and Chief Executive OfficerA&E Television Networks (partowned)Toon DisneySoapNet Stuart W. Volkow 38
  • 39. News Corp (NYSE:NWS) $28.6 B•Fox Filmed Ent. •34 pics in 07, 711 Home Ent. Titles •Searchlight, Fox Atomic, Animation •Twentieth Century Fox TV (TCFTV)•Fox TV: 35 Stations, 9 DMAs have 2, 25 FOX affiliates •FOX, 213 Affiliates •FX, FUEL, SPEED, Fox College Sports, Fox Movie Channel•STAR: 53 Asian countries, 10 languages.•DBS, BSkyB James Murdoch•Publishing •145 daily newspapers •Dow Jones Stuart W. Volkow 39
  • 40. Stuart W. Volkow 40
  • 41. News Corp: Fox Interactive•2005 acquisitions:•$580 Million for Intermix Media, aka MYSPACE.•$650 million for IGN Entertainment, Inc, a leading community based Internet media and services company for video games and other forms of digital entertainment.•Scout Media, Inc., the parent company of Scout.com, the country’s number one independent online sports network, and Scout Publishing, producer of 47 of the most widely read local sports magazines in the U ( www.scout.com ) WebMD/The Health Network Stuart W. Volkow 41
  • 42. 42
  • 43. Time Warner (TWX) •Adelphia •Classic Film and• HBO Animation Library Commuinication• Cinemax •Cartoon Network •Warner Music Group• TBS •Court TV •Warner-Elektra-Atlantic (record distributors/• CNN •Turner Classic marketers)• WB - The CW Movies• New Line •Boomerang •Warner/Chappel (publishing and music• CNN •American Online rights holders) •Time Inc. – 64 magazine titles •Time-Warner Trade Publishing Inc. •Warner Books Stuart W. Volkow •Little Brown (publishing) 43
  • 44. Americas most successful premiumtelevision company, Home Box Officedelivers two 24-hour pay television services—HBO® and Cinemax®—to over 40million U.S. subscribers.40+ millionHBO and Cinemax subscribers in the U.S. asof December 31, 2009 Stuart W. Volkow 44
  • 45. TBS, Inc. is based in Atlanta, GA, and employssome 11,000 people worldwide. Philip I. Kentoversees TBS, Inc. as chairman and CEO. Stuart W. Volkow 45
  • 46. Time Warner Interactive Units • Bebo.com • $850 million for 3rd largest social nethttp://www.timewarner.com/corp/aboutus/digital_initiatives/index.html Stuart W. Volkow 46
  • 47. Sony Corp (PINK SNEJF)•Sony-BMG Music (with Bertelman)•Sony Pictures Entertainment Sony Electronics •Columbia Pictures Sony Broadcast Media Co. •Sony Pictures Classic •Screen Gems •TriStar Pictures Sony Pictures Home •Sony Pictures Releasing Entertainment •Part owner of MGM Studios Sony Pictures Television (along with Comcast), which is part Sony Pictures Television owner of United Artists (Tom International Cruise and Paula Wagner). Sony Pictures Consumer•American Movie Channel - part Productsowned•Bravo - part owned•Independent Film Channel - partowned•WE: Women’s Entertainment - partowned Stuart W. Volkow 47
  • 48. Sony Digital and InteractiveSony Pictures Mobile Sony Pictures Studio Sony Pictures Studios Post ProductionFacilities DVD Authoring Center Worldwide Product Fulfillment Gameshow Network (joint owner) Movielink (joint venture) Crackle.comSony Pictures Digital Sony Pictures Imageworks Sony Pictures Animation SonyPictures.Com Sony Online Entertainment Sony Pictures Digital Stuart W. Volkow 48
  • 49. CABLEVISION $1.8 $10.8 BStuart Wayne Volkow, Copyright 2009 49 49
  • 50. Discovery Communications $10.8 BStuart Wayne Volkow, Copyright 2009 50 50
  • 51. 1 Discovery Channel 2 TLC 3 Animal Planet 4 Science Channel 5 Investigation Discovery 6 Military Channel (??) 7 Planet Green 8 Fit TV 9 HD Theater 10Discovery en Español 11Discovery Familia 12OWN: OPRAH WINFREY NETWORK 13The Hub 143netStuart Wayne Volkow, Copyright 2009 51 51
  • 52. Liberty Media (NASDAQ:LINTA) $7.8 B John C. Malone, Chairman • QVC • IAC/InterActiveCorp • Encore • VONGO.com • Starz • On Command • Fun Games • GSN Stuart W. Volkow 52
  • 53. EW Scripps (NASDAQ:ssp) $2.5 B•CATV •Broadcast TV •HGTV (96 million HHs) •6 ABC Stations •Food Networks •3 NBC •DIY •1 Independent •Fine Living •GAC •Internet •HGTV.com •17 Newspapers •Shopzilla •uSwitch Stuart W. Volkow 53
  • 54. 54
  • 55. $2.1 B $11.6 B20 million subs 55
  • 56. 56
  • 57. 57
  • 58. Universal Music Group (VIV.PA)American RecordingsDecca ClassicsDef SoulDreamWorksHip-O RecordsInterscope/Geffen/A&MIsland/Def JamMCA NashvilleMCA RecordsMercury NashvilleMotownUniversal ClassicsUniversal LatinoUniversal Music GroupUniversal RecordsVerve Stuart W. Volkow 58
  • 59. Sony BMG Music Group Bertelsman AG / Sony Corp of America 50/50Sony BMGs revenue has now fallen46.3% over the last five years, whilethe number of employees at thelabel has dropped from 4,880 in2003, to 2,851 in 2007. Stuart W. Volkow 59
  • 60. Warner Music Group $3.38 Billion > one million compositions Warner Music reported a loss of $16 million, or 11 cents per share, in the quarter ended Dec. 31, after a profit of $18 million, or 12 cents per share, in the year-earlier period. The results sent shares of the New York-based music company tumbling $1.80, or 20.6 percent, to $6.94 Wednesday. The stock has traded in a 52-week range of $4.57 to $21.51. AP 6 Feb 2008 Stuart W. Volkow 60
  • 61. Why Pandora Is on VirtuallyEvery DeviceOn Fridges, Fords and Phones, Its Become the De FactoRadio App After Being on the Brink of Bankruptcy FEBRUARY 11, 2011, 7:25 PM I.P.O./OFFERINGSBy: Andrew Hampp Pandora Files to Go Publ BY EVELYN M. RUSLI Thor Swift for The New York Tim Westergren, founder of Pandora Media. "Smartphones really turned Pandora into an anytime, anywhere service without us doing anything," Pandora founder Tim Westergren said, noting that half of smartphone listening is done in users cars. Yvonne Malmgren, a spokeswoman for the BMW Group, said Mini drivers overwhelmingly asked for the service when the automaker started researching potential partners for its new Mini Connected App player. Stuart W. Volkow 61
  • 62. usic EMI Group £1,751.5 million EMI revamp tougher than expected, says owner Hands Text Hands is controversially trying to take power away from the music talent scouts and give it to marketing men, under his plan to turn round the underperforming group, a plan that has drawn loud criticism from some of its biggest acts. Reuters 27 Feb 2008 Stuart W. Volkow 62
  • 63. Daryl ZanuckSamuel Z. Arkoff Louis B Meyer Irving Thalberg Copyright 2009 Stuart Wayne Volkow. Xtropia Partners William Fox 63
  • 64. IN THE BEGINNING, THE SEVEN MAJOR STUDIOS HAD DIRECTLY FINANCED, PRODUCED AND DISTRIBUTED THEIR OWN PRODUCT, ADDITIONALLY, THEY CONTROLLED TALENT, DIRECTORS AND PRODUCERS. Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 64
  • 65. Paramount Pictures Corporation1914ViacomSony Pictures Entertainment Inc (Columbia, Tristar)Columbia founded in 1919.Sony Pictures Entertainment IncTwentieth Century Fox Film Corporation1933News Corp.Universal City Studios LLP1912Vivendi – UniversalWalt Disney Studios Motion Pictures1923Disney ABCWarner Bros. Entertainment Inc.Albert, Sam , Harry and Jack Started in 1903 by showing “The GreatTrain Robbery” Sam brought sound to the movies with the Jazz Singer.Time Warner Communications. (from merger of WB with Time Inc.) Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 65
  • 66. The MPAA StudiosCopyright 2009 Stuart Wayne Volkow. Xtropia Partners 66
  • 67. “Mini Majors” or“Independents” 67
  • 68. NATO Statswww.natoonline.org150,000 screensworldwide,with about 40,000screens in the U.S Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 68
  • 69. 100 million admissions per week in 1946Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 69
  • 70. !Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 70
  • 71. Copyright 2009 Stuart Wayne Volkow. Xtropia Partners ! 71
  • 72. Movie Econ 101 100 Million GBO Box office % of Gross Gross Participation 10 Exhibitor 50 Distributor 15 P &A 40 Production Budg 60 Deficit $75Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 72
  • 73. The Global Advertising Conglomerates •Omnicom •WPP Group plc •Interpublic •Publicis •Dentsu •HavasSir Martin Sorrell, WPP Group plc Copyright 2009 Stuart Wayne Volkow. Xtropia Partners 73
  • 74. Hollywood Power Shift Agents, Managers, Studios, Talent THE REAL 74
  • 75. Agents and Managers The Power Elite Category 5 Jeff Kwatinetz, The FirmEntertaiment Nick Stevens Asif Satchu, Mordicai Wicyk Media Rights Capital Brillstein Entertainment 11/13/2006 Copyright 2006 Stuart Wayne Volkow Partners 75
  • 76. Ari Emanuel 76
  • 77. Stuart Wayne Volkow, Copyright 2009 77 77