The Media Business

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From a Mass Media lecture at Montana Tech, based on Hanson's text Mass Communication.

Published in: Business, News & Politics
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The Media Business

  1. 1. The Media Business Consolidation and Globalization
  2. 2. <ul><li>Steve Jobs, one of the most powerful people in media. </li></ul><ul><li>1985, after leaving Apple, Jobs founded NeXT Inc. </li></ul><ul><li>2001 made Apple into a “digital hub” for all types of media and entertainment content. </li></ul><ul><li>Stanford Commencement Speech @ 8’00” </li></ul>
  3. 3. Development of Private Ownership <ul><li>1638: First printing press in North American colonies </li></ul><ul><li>1690: First newspaper published in colonies </li></ul><ul><li>1830s: Penny press begins </li></ul><ul><li>1840s: Telegraph industry owned privately, not by government </li></ul><ul><li>1930s: Growth of national news </li></ul>
  4. 4. <ul><li>Ken Auletta, media columnist for the New Yorker says: </li></ul><ul><li>“ Changes in the way we communicate will transform the way we live.” </li></ul><ul><li>Questions emerge: What is going to happen to the media business? And Is there still such a thing as mass communication? </li></ul><ul><li>http:// www.kenauletta.com / </li></ul>
  5. 5. Big Media <ul><li>Consumers have more media choices than ever before. </li></ul><ul><li>The number of companies providing those choices has declined. </li></ul><ul><li>Six companies dominate American media, though new media companies (Apple, Google) are emerging. </li></ul>
  6. 6. Big Media <ul><li>Vertical Integration Controlling all aspects of a media project, including production, delivery to consumers in multiple formats, and the promotion of the product through other media. </li></ul><ul><li>Synergy A large company can use the strengths of its various divisions to market its content. </li></ul>
  7. 7. <ul><li>Synergy and The Simpson’s Movie: </li></ul><ul><li>. Grossed $527M globally ($183M in USA). </li></ul><ul><li>Movie’s success can be attributed partially to year-long plans for cross-media promotion by News Corp. </li></ul>
  8. 8. Look at this under the lens of various Theories of Media and Society <ul><li>Functional Analysis </li></ul><ul><li>Agenda Setting </li></ul><ul><li>Uses and Gratifications </li></ul><ul><li>Social Learning </li></ul><ul><li>Symbolic Interactionism </li></ul><ul><li>Spiral of Silence </li></ul>
  9. 9. Who Are Big Media? <ul><li>Time Warner </li></ul><ul><li>Disney </li></ul><ul><li>News Corporation </li></ul><ul><li>Viacom/CBS </li></ul><ul><li>Bertelsmann </li></ul><ul><li>NBC Universal (General Electric, Comcast) </li></ul>
  10. 11. Time Warner <ul><li>2008 Sales: $46.98 billion </li></ul><ul><li>Started out in 1922 by Henry Luce and Briton Hadden with Time Mag. By 1930 bought Fortune , in 1936 Life . Mag. In 1989 Time merged with Warner Comm. – Warner Bros movies studio. </li></ul><ul><li>Major player in film, television, cable, publishing, and online content. </li></ul><ul><li>Home of Scooby Doo, Harry Potter, Batman </li></ul>
  11. 12. Time Warner <ul><li>2008 Sales: $46.98 billion </li></ul><ul><li>In 2001, New media company AOL bought Time Warner in a merger that did not turn out well – problem with synergy. </li></ul><ul><li>(See page 85) </li></ul><ul><li>Bigger isn’t always better. </li></ul>
  12. 13. Disney <ul><li>2008 Sales: $37.84 billion </li></ul><ul><li>Started in 1928 with Walt Disney’s Mickey Mouse cartoons. </li></ul><ul><li>In 1950s Disney started producing live action and Disneyland was built. </li></ul><ul><li>Was among first Hollywood movie producers to see potential in TV with Walt Disney Presents. </li></ul>
  13. 14. Disney <ul><li>Major player in broadcast TV, cable, movies, and international theme parks. </li></ul><ul><li>Home of Mickey Mouse, Pixar. </li></ul><ul><li>Steve Jobs of Apple is largest single stockholder. </li></ul><ul><li>Regarding “synergy” Disney runs a bootcamp for executives. </li></ul><ul><li>Media convergence. Hulu and iTunes provides viewers with opportunities to see shows and movies. </li></ul>
  14. 15. News Corporation <ul><li>Fiscal Year 2009 Sales: $30.42 billion </li></ul><ul><li>Controlled by Rupert Murdoch and family. </li></ul><ul><li>Major player worldwide in all media – politically conservative. </li></ul><ul><li>Home of Fox News, Wall Street Journal , Fox Broadcasting </li></ul>
  15. 16. Viacom/CBS <ul><li>Combined 2008 Sales: $28.5 billion </li></ul><ul><li>Major player in broadcast television, cable, movies </li></ul><ul><li>Home of MTV Networks (MTV, VH1, Nickelodeon, BET) </li></ul><ul><li>“ Child Buys the Parent” -- CBS owned Viacom; then Viacom owned CBS; now separate companies for financial reasons. </li></ul>
  16. 17. Bertelsmann <ul><li>2008 Sales: $22.7 billion </li></ul><ul><li>Major player in publishing; also magazines and European broadcasting </li></ul><ul><li>Home of American Idol and Idol programs globally </li></ul><ul><li>Privately held German company </li></ul>
  17. 18. <ul><li>Making money with Idol. </li></ul><ul><li>American Idol -- most profitable mm property, value $2.5B. </li></ul><ul><li>Advertising, Product placement, Licensing, Online advertising, International broadcasting, concerts, text messaging, CD sales, Publications. </li></ul>
  18. 19. NBC Universal <ul><li>2007 Sales: $15.4 billion </li></ul><ul><li>Major player in broadcast television, cable, movies </li></ul><ul><li>Was the only major broadcast network not owned by media conglomerate. (formerly owned by corporate giant General Electric) </li></ul><ul><li>BUT recently, Cable giant Comcast purchased NBC Universal from GE for $13B. S ee link </li></ul>
  19. 20. Long Tail vs. Short Head
  20. 21. Long Tail Media vs. Big Media (Short Head Media) <ul><li>Long Tail Portion of a distribution curve where a limited number of people are interested in buying a lot of different products. </li></ul><ul><li>Short Head Portion of a distribution curve where a large number of people are interested in buying a limited number of products. </li></ul>
  21. 22. Characteristics of the Long Tail <ul><li>High number of goods; more niche goods than hits </li></ul><ul><li>Low cost of reaching markets </li></ul><ul><li>Ease of finding niche products </li></ul>
  22. 23. Characteristics of the Long Tail <ul><li>Flattening of the demand curve for mainstream hits; choice lowers demand for hits </li></ul><ul><li>Size of collective market; collection of niche products can be as big as hits </li></ul><ul><li>Tailoring to personal tastes; consumers want content that fits their own wants and needs </li></ul>
  23. 24. Consequences of the Long Tail <ul><li>Democratization of the means of production </li></ul><ul><li>Democratization of the means of distribution </li></ul><ul><li>Greatly reduced cost of connecting suppliers and consumers </li></ul>
  24. 25. Who Controls the Media? <ul><li>Owners </li></ul><ul><li>Advertisers </li></ul><ul><li>Government </li></ul><ul><li>Special Interest Groups </li></ul><ul><li>News Sources </li></ul><ul><li>Audiences </li></ul>

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