Media as Businesses

1
Media as Businesses

1. Business organization
2. Implications?

2
Media business video clips

• Entertainment Tonight
• Xena, Warrior Princess
• Hollywood Squares
• MTV

3
Facts about media Concentration

• Increasing Concentration
• Most people unaware
• Media ownership no longer LOCAL
• Ownership increasingly trans-national

4
Issues, Concerns

• Power of media moguls
• Tomorrow Never Dies
• Elliott Carver
• Hidden agendas, conflicts of interest
• Media globalization
• Internet immune?

5
How real an issue today?

• Big media dominate US, world
• AOL, Time Warner merger
• AOL worlds 1 provider of online services
• Time Warner one of worlds largest traditional
  media companies

6
AOL Time Warner

• Leader in every major media sector
• 78.3m Internet visitors
• 21 US magazine revenues
• 19 U.S. cable subscribers
• 13 of box office sales
• 16 music sales

7
What does the merger mean?

• Faster Internet service
• Interactive TV
• Online music
• Movies online
• Advertising, e-commerce
• New media amalgams
• Cross promotion

8
Concerns about merger

• Huge company
• Potential to dominate U.S. media markets
• Power to exclude rivals
• FTC consent decree new company to facilitate
  competition

9
Other conglomerates?

• NBC RCA/GE
• CBS Viacom
• ABC Disney
• UPN Viacom
• Fox News Corp.
• WB AOL Time Warner

10
Global media giants

1. AOL Time Warner (41b)
2. Disney (24.8b)
3. Vivendi/Seagram (16.6b)
4. Viacom (14.9b)
5. Bertelsman(14.8)
6. News Corp. (14.1b)
7. Sony (10.8b)
8. NBC/GE (7b)

11
Media conglomerates

• National, international companies
• AOL Time Warner, Viacom, News Corp., Gannett, GE
  
• Puget Sound media

12
Types of ownership

• Governmental ownership or funding
• Employees work for govt.
• Revenues taxes, fees
• Profit?
• Capital, not commercialized
• - Government

13
Types of ownership

• Private ownership, individuals or groups
• Revenues sales
• Profit required
• Competition, independence
• - Commercialization, independence

14
U.S. media characteristics

• Pvt. ownership, minimal govt. control
• Media businesses
• Profit orientation
• Revenue Ads, subscription

15
Advertising revenues
Medium /ad revenues
Daily newspapers
TV
Magazines
Radio
16
U.S. media characteristics

• News industry standards
• Competitive environment
• Economies of scale
• Unit costs drop in mass production
• Economic efficiency/vertical integration

17
Why concentration?

• FCC rules
• Media very profitable
• Existing profits
• Attractive to sell
• U.S. tax laws
• Concentration savings
• Synergy

18
on Concentration

• Economies of scale
• More resources, potential for quality
• More public service
• Greater independence
• Greater investment

19
- on Concentration

• Fewer voices
• Private agendas
• Public unaware
• Synergy of dubious public value
• Loss of family companies
• No longer local

20
Rupert Murdoch

• Danger to democracy?
• News Corporation
• Criticisms
• Politics
• China
• Content
• Goals

21
Media business video clips

• Entertainment Tonight
• Promotion of Viacom companies VH1
• Xena, Warrior Princess
• Production ending no vertical integration
• Hollywood Squares
• Promotion of CBS show
• MTV
• Promotion of Viacom products (CD, book, play,
  movie)