Media Systems and Communication Technology.
natalia.na
Hanson7e_PPT03.pptx
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Chapter 3
The Media Business: Consolidation, Globalization, and the Long Tail
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Mark Zuckerberg & Facebook
Business model for Facebook is that we will be willing to share lots of details about ourselves.
Facebook uses your information to target ads
Company criticized for sharing your data with partners without your permission.
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Mark Zuckerberg and Facebook
Facebook has the largest audience of any medium, but not the largest revenue
Company’s importance can be measured in income, profits, audience size, audience engagement
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Development of Private Ownership
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Big Media
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Legacy Conglomerates
Disney
News Corp. and 21st Century Fox
Time Warner
Viacom & CBS
Bertelsmann
All are multinational businesses
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Disney
2016 revenue: $55.6 billion
Major player in broadcast TV, cable, movies, theme parks
Home of Mickey Mouse, Pixar, Marvel & Lucasfilm
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Disney
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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News Corp. and 21st Century Fox
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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News Corp. and 21st Century Fox
Both companies controlled by Rupert Murdoch and family
Good at handling changing media environment
Gives consumers what they want
Refocusing 21st Century Fox on core businesses
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Time Warner (Now Warner Media)
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Time Warner (Now Warner Media)
Major player in film, television, cable, publishing, and online content
Home of Scooby Doo, Harry Potter, Batman
Most recently sold off magazine division
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Time Warner (Now Warner Media)
Lessons of company downsizing:
Bigger isn’t always better
Concentrate your strengths on what you do best
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Viacom and CBS
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Bertelsmann
2015 sales: $20.4 billion
Major player in publishing; also magazines and European broadcasting
Adapting to changing music business
Privately-held German company
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Big Media: The New Players
New companies for new media
Comcast/NBC Universal
Alphabet/Google
Apple
Remember – there are no mainstream media
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Comcast / NBC Universal
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Alphabet/Google
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Apple
2016 total revenue of $216 billion
$137 billion from mobile phones (iPhone)
$21 billion from iPads
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Apple
$35 billion from music, videos, apps and other
$25 billion from conventional computer product
Apple has redefined how we consume and use media
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Media Transformations: What Is the Right Size?
AT&T acquires Time Warner, renames it Warner Media
Disney and Comcast had a bidding war over who would acquire entertainment properties from 21st Century Fox; Disney won
CBS and Viacom have ongoing struggle over being two or one companies
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Long Tail Media vs. Big Media (Short Head Media)
Long tail Portion 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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Long Tail vs. Short Head
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Characteristics of the Short Head
Relatively fewer goods and services offered
Large potential market
Place for big, popular media products – hit movies, TV shows, music
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Characteristics of the Long Tail
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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Consequences of the Long Tail
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
Hanson, Mass Communication: Living in a Media World, 7e
SAGE Publishing, 2019
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