Media Giants and their Strategies

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Media Giants and their Strategies
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Mergers

• Intensification of merger activities in the 1990s
  into the 21st century.
• Why?
• Maximize sales
• Create efficiencies in production
• Position in readiness to fight competition
• Ambitions of chief executives

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Structural trends (1)

• Growth through merger and buy-out
• More capital, bigger projects
• Larger audiences, more advertising revenues
• Bigger archives, more profit
• Synergy
• New technology helped generate more outlets,
  in turn stimulating merger activity
• Politics of deregulation allowed more growth

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Structural trends (2)

• Integration (horizontal and vertical
• Horizontal integration involves diverse holdings
  and more outlets for products
• Technological change, including digitization,
  enhances value of horizontal integration,
  bringing together media, telecommunications and
  computing
• Vertical integration marries content with
  distribution

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Structural trends (3)

• Globalization
• Inspired by saturation of domestic markets
• Media giants may compete with or dominate local
  media of other countries
• Globalization can dramatically increase revenue
  with little increase in cost

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Structural trends (4)

• Concentration of ownership in late 1990s
• 2 companies account for one third of all
  retail book sales
• 4 movie companies account for more than 75 of
  box office revenues
• 5 companies distribute 95 of all music
• TV dominated by 4 networks
• Over 80 of newspapers owned by chains
• Most newspapers have local monopolies