Competition Begins

If you have been following the news, you would know that today Google released its Google Music. According to this article, it will probably do very well. The release of Google Music comes less than a week after Apple released its iTunes Match. Both of these take advantage of cloud, but analysis would make it seem that in the long run Google Music will turn out on top.

Google Music just has too many advantages. For example they make it easier for artists with the rights to their own music to get their music out there. They also have an innovative way expose people to more music by allowing them to listen to all their friends songs once. Google Music's one disadvantage is that it has not made an agreement with Warner Music, but this is will only affect them short term. Even with the release of iTunes Match, Apple is not showing many signs changing or innovating its music services. This could easily end its dominance in the industry.

Logging On: The Virtual Workforce

In Medias Res was asked "What workforce trends is the industry experiencing?"

Now, we've been talking about the growth in online and social media weekly. But I guess, there's nothing really wrong with emphasizing our point, yet again.

The media industry does more than hiring actors and actresses. Whereas making it big in the 1980's meant moving to New York City or Hollywood, today- all you need to do to get out there is stay creative and online.

Mark Zuckerberg can tell you that, too. The Facebook team has to put a lot of work into their online community.

It's not just social media companies that need to focus. Virtually all parts of the media industry need a media workforce- a focus on their online community.

Today, companies in the media industry focus on their online communities- consuming and sharing the work that theses companies make available online (whether it's Hulu or YouTube videos or articles from the Huffington Post). And this community needs to be moderated and kept up with- it isn't enough that major newspapers and networks get online. They need to have a lot of effort focused on online traffic, the feedback issued by users, keeping the site clean and spam-free (hopefully), and coming up with new ideas and new discussions. In doing that, customer loyalty is being fostered- or at the very least, the online audience will grace the companies with a "bookmark" by saving their page on their computer.

The online newspaper is a different product than what we get delivered to our doorstep periodically. A level of interaction is brought in- just check out Newsmap, a site that gives readers access to top stories based on how much attention is given to the headlines in each country. The online reformation has created different jobs and has made media giants

And the Award for the Fourth-Most Admired Company in the Media Industry Goes to Google!

Google is a company that has been admired in the past few years for the company’s organizational structure. According to Fortune Magazine, a well known business magazine, “Google is the fourth-most admired company in the United States.” Google has been featured multiple times as well on the top-companies-to-work-for list. The main reason Google is such a widely admired company is because the management lets the employees run the company as much as possible. Google has a cross-functional organization that allows excellent leadership as well as employee satisfaction. Cross-functional organization is described as a group with different functional expertise working toward a common goal. For Google that common goal is to be the best search engine on the Internet. Google is also a well admired and structured company because the management team doesn’t set the goals for the company, the employees do. Employees set objectives which are approved by the management. Management periodically checks up on the progress of the goals, but it is all done by the employees. Google employees spend “70% of their time on current assignments, 20% on related projects of their choosing, and 10% on new projects in any area they desire.” The structure of their time management is called the 70-20-10 rule. Google uses this rule to make sure that the employees take risks. Without these risks the company wouldn’t be as successful as it is now. Also without risks Google wouldn’t have ventured into the multiple industries it has. I admire Google’s policy where the employees are the main figures of the company, with management overseeing their works. I feel that is the most effective way to structure a company.

CEO Makes It Go

An article in the WSJ states that the profits of Disney Channel rose 30% because of theme parks and TV. Also, investing in Russia, China and India would solidify the company’s position and further assist its growth.

Such progress cannot be achieved without the right leaders and the right strategies. In this case, Chief Executive Officer (CEO), Robert Iger played a huge and vital role in bringing the company to this position.

One of his strategies includes the implantation of theme parks in different countries around the world. Shanghai Disney Resort is one of the key factors in the company’s revenue/profit growth in China.

Another strategy CEO Iger chooses to pursue is launching the Disney Channel in different areas as well. Recently, the Channel was launched in Russia.

Finally, reducing production costs is also important in the company’s growth. The to-be-release movie “Muppets” cost only $50 million to produce.

A combination of all these elements helps create one of the fastest growing companies in media. Without human resources, skills and leadership, none of this would have been possible.

Top Innovators in Media

Over the past few years, it seems as if the media industry has expanded more during this generations than it has at any other time in history. Throughout every field in the media industry there has been a select group of innovative leaders who have revolutionized their fields. In social networking, we have the like of Mark Zuckerberg (Facebook), Jeff Weiner (LinkedIn), and Jack Dorsey (twitter), who have completely changed the ways in which people network. In enterprise and cloud computing, perhaps the most prominent leaders are Sergey Brin with Larry Page (Google), Padmasfree Warrior (Cisco), and Andy Stanford-Clark (IBM) who have simply created a metamorphosis of how people communicate with each other. As for the News category, innovative leaders such as Rupert Murdoch (News Corp.), Fiona Spruil (NY times), Arianna Huffington (Huffington Post), and Kim Walton (CNN) are constantly finding new and creative ways to deliver the news to the public. While in the digital entertainment category Eddy Cue (iTunes), Chad Hurley (YouTube), and Reed Hastings (Netflix) have dramatically transformed how we watch videos and listen to music.

Tim Starts to Cook

An article in the WSJ states that the new Apple entrepreneur, Tim Cook’s, ability to follow in the footsteps of his late boss, Steve Jobs, is questionable.

Cook’s management strategy differs than Mr. Jobs in a promotional sense. He believes more in the promotion and the iDevices than Mr. Jobs did.

He seems to give more attention to stakeholders outside the firm itself such as consumers and investors. He is increasing the business-consumer relationship by “sending a variety of company-wide emails that address Apple employees as "Team,"”. As for the investors, he is intensifying his meetings with them.

Moreover, his plan is to increase the firm’s corporate social responsibility –philanthropy, to be specific –which will lower the company’s revenue $10,000 yearly while Mr. Jobs opposed charitable programs.

These entrepreneurial strategies may prove to be promising as well as disappointing. The author may think that Tim Cook might not be able to continue “the string of hits that have made Apple the world's largest technology company”, but others might disagree and say “satisfying as much stakeholders as possible is never a hindrance –if not an enhancement”

Google enters the competitive landscape...again

With countless numbers of companies aiming to provide consumers with entertainment, media can be quite a competitive industry. In such a wild competitive landscape, it takes true entrepreneurship to set you apart form the competition. Google is a perfect example of a company that seeks to be involved in competition. Just when we thought Google couldn’t get more involved in the services they provide, they somehow find a way to surprise us. Google has put up several headlines over the past year. First it was the revealing of their social media website, Google +. Then it was revealed that Google would be entering competition with Apple and Amazon’s music services by starting Music Beta. Now, Google appears to be entering competition with Apple’s Apple TV services.

This past Friday, Google announced an update to the software for Google TV. Google stated that they simplified the product to allow users to access the Internet and search for online videos through their TVs. Google TV will also offer on-demand shows that are normally available of services such as Netflix and Hulu. Google has recently reached a deal with various chipmakers, device makers, and TV makers, such as Vizio and Sony, which will bring new Google-powered TVs into the market next year.

Google plans to separate itself from Apple TV in that Google TV will provide access to all content available on the Internet, instead establishing a narrow amount of offerings formatted for use on TVs. Some analysts are viewing Google TV as potential threat to cable/satellite companies. Google on the other hand stated that Google TV isn’t meant to replace TV and cable, but rather to complement it. Google seems to be on the right track. They seem to be doing a great job in entrepreneurship seeing as how they are involved in almost every aspect of media's competitive landscape.

To the Internet & Beyond!

At In Medias Res, we are racking our brains for opportunities for entrepreneurship in the media industry.

We had our Eureka moment when we stumbled upon this Wall Street Journal article.

Online advertising is opening up and is presenting itself as a very good opportunity for entrepreneurs.

"U.S. online advertising revenues rose: 3% in 2009 and 15% in 2010, and S&P Capital IQ estimates an increase of 10% in 2011," says Scott Kessler- quoted on NetAdvantage as a top analyst in internet software & services, a sub-industry of what we, here at In Medias Res, care about. The growing revenues from online advertising give investors a sense of security within the media industry.

And with thriving social media sites, like Facebook and Twitter, a lot of advertising space is being made available and is waiting to be snagged up. And because this is through the internet, many mediums are available for advertisers: from videos to pop-ups to promotional Facebook group pages with interactive games. Various ad-technologies are being developed and the growth of this industry shows many opportunities for newcomers. Online advertising is being redefined, with ad-technology changing hands and with the area re-consolidating itself, as the article suggests.

Entrepreneurship in the Media Industry

Currently in the Media industry, there is a lot of entrepreneurship happening. Entrepreneurship thrives when there are many unfilled niches. While traditional media such as newspapers, and television are saturated and make it very difficult for entrepreneurs, there are many opportunities elsewhere. There are a lot of success stories in entrepreneurs using the internet in creative ways.

This article tells about a recent entrepreneur that is doing very well. Groupon started in 2008 as a way for companies advertise by offering great deals through a middleman. This is great for small businesses to get their name out while Groupon gets their cut.

Another entrepreneurship that caught my eye is Foursquare. This article explains how Foursquare started and 2009 and outdid its large competitors in location services such as Facebook and Google. Foursquare is now the leader in location services.

Can Netflix Change the Media Industry, or Will It Stay In a Funk?

In Medias Res was asked this week: in what areas of the media industry are there opportunities for innovation?

Reed Hastings, CEO and entrepreneur of Netflix gives good advice about being an entrepreneur in the media industry. He also gives good tips and his visions for Netflix, which leaves way to improvement within the media industry. When asked his advice on becoming a successful entrepreneur he remarked, “creating freedom and responsibility” in the work place. One example of freedom and responsibility is having no vacation policy. If you work for Netflix, you don’t have a set amount of days you can take off for vacation according to Reed Hastings. Yet freedom and responsibility aren’t the only improvements being made within Netflix and the media industry. Reed Hastings has some visions that could change the online streaming of TV and movies forever.

Entrepreneurs have taken over the media industry. A rise in the use of social networking, Facebook, Twitter, and Google +, but social media isn’t the only sub-industry that has effective entrepreneurs. Netflix’s Reed Hastings has two visions for Netflix. Netflix is taking advantage of the fact that the internet has evolved our culture. He plans to “change the online experience” because of the fact that internet has gone from dial up to fiber. This one single changed has allowed Netflix to work faster and be able to stream more videos, thus making the online experience much more enjoyable, and Reed Hastings point of taking advantage of the internet as a success.

Reed Hastings has also said that he would like to take the mobile market and go global with Netflix as his second vision. According to Forbes.com, “there are 5 billion people on mobile.” With the 5 billion projected people on mobile as Netflix’s audience, Reed Hastings says, “His dream is to see Netflix rolled out across the globe, in the process of becoming the world’s best entertainment distribution platform.” With both of these projected goals, Mr. Hastings wants to basically take over the world with internet and mobile domination of entertainment.

Revenue of GE, Profit of Disney.

Although the Walt Disney Co. tops the charts in terms of profit, General Electric Co. dominates in terms of revenue with 128,051 million dollars in year 2000, $180,929 million in 2008 and $149,060 million in 2010. This at least triples the revenue of Disney in any year. However, we cannot make judgments yet, we still need to know how much of a percentage the profit is of the revenue.

GE had a 12.8% return on revenue of profit in year 2000 while Disney received 9.8%. However, the earliest statistics show that GE got an 8.5% return on revenue of profit while Disney had a 10.4%.

Then why is Walt Disney still on top? Because General Electric has a broader range of supplies -goes even beyond entertaining- so when you balance between the ratios, it will be apparent that the revenue Disney is receiving is massive relative to the number of products and services the company offers in comparison with GE which produces a lot more than Disney while Disney remains a clear competitor.

How the Recession Affected the Media Industry

According to this article, the recession heavily damaged part of the media industry. Of the 37 ratings made by the S&P in European media space in 2010, 90% were negative. Newspapers lost a lot of revenue from advertising as well as a decline in newspaper subscriptions. As you can see in the above chart from here, newspaper advertising revenue declined by 25 percent in the United States. With the recession, newspapers are moving away from print and onto cheaper online content. This diversification is likely to greatly help the industry in the long term.

Other parts of the media industry seem to be doing well. This article discusses how the movie industry is doing quite well. More people are going to the movies despite higher prices. With consumers seeking an escape from realities, the movie industry looks like it will continue to be doing well in the future.

Google Music vs. iTunes: Who Will Take Over the Industry?

In Media Res was asked to look at recent news in the media industry. We found the most important new in the media industry is that competition is heating up. Google Inc. just introduced its own online music player that would work closely with Google Plus- the Google Inc. social network. “Google Music” is the current name of the product that Google is working with. This online music source would work much like an iTunes or the newer Spotify in a way that Google customers would share their musically libraries with their Google Plus contacts who could listen to the music for free, however the catch is you may only listen to it free once. After the one free listen, the song would be available for downloading for 99¢ per purchase, which currently is cheaper than iTunes purchase rate of $1.29. However, controversy has struck Google Inc. in regards to the participation of all four major-label companies. Without the participation of Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI, the four major-label companies, dissatisfaction of customers is bound to be an issue. Without all four major-label companies this also compacts the amount of songs available for listening and downloading, for many customers they want all the convenience of a one-stop shop. Google Inc.’s competitors though have all waited until the guarantee of all four major-label companies before issuing their music services.

Online music is becoming a major trend. While Google Music is still in its elementary phase, there are certain glitches that still need to be worked out. Google Inc.’s competitor, iTunes, according to Wall Street Journal, is about to start an online music listener that will create revenue for the company as well as all the major-label companies. Spotify-a new online music listener that allows sharing between Facebook friends launched their product over the summer. Even Spotify has revenues of $10 a month for the ad-free smartphone version and $5 a month without ads. With all the competition in online music players, Google Inc. may have a hard time breaking into the music industry.

Hello to Hulu

When looking at the current events in the media industry, our team at In Medias Res always keeps an eye out for the many ways that media sources are available to viewers. Today, you don't need to TiVo a show in order to keep up with it. At least, not as long as you have Hulu.

Hulu. a website that has been making selected episodes (and sometimes entire seasons) of television shows available to the masses, is jointly owned by Walt Disney Co, News Corps, and Providence Equity Partners LLC. Its owners had decided to put it up for sale. And now... well, if you were dreaming of owning Hulu, your opportunity has passed. Hulu is off the market and will continue under the same ownership.

What's in store for Hulu? It's best put in this interview with Sam Schechner:

According to the Wall Street Journal, the owners are trying to re-draw the lines of their ownership. Imagine the way US, UK, and Russia drew lines around Germany and Berlin after WW2, and the way they designated who would be in charge of what. Well, hopefully, the overall process will be a lot more cohesive than that. The last thing we need is a "Cold War" of online videos!

Still, the owners (Disney, etc.) failed to find a high bidder that would agree with their terms. Dish Networks and Google were the last two serious contenders. Dish Networks was bidding around $1.9 billion and Google, while offering $4 billion, had its own terms in mind. So the whole deal was thrown out, and Hulu stays under the same ownership- perhaps with redrawn lines.

At In Medias Res, we are excited to see what becomes of Hulu in the long run. As they continue to add more and more content and to seek more Hulu Plus subscribers ($7.99/month gives subscribers more access to shows and movies). But it's still possible that it will change hands down the road. The website may be split between more global media giants when the licensing agreements will be renewed in a few years.

Incoming Revenue Among Key Entertainment Companies

When looking into the movie and entertainment industry, perhaps no name is bigger than Walt Disney Co. With fields in media ranging from music to sports, they seem to hold a strong presence everywhere in the industry. From 2007 to 2010, Walt Disney Co. brought in the most revenue among its competitors. In 2007, their annual revenue was $35.510 billion, which increased to $37.843 billion, dropped to $36.149 billion, and then increased again to $38.063 billion in 2010. Throughout this four-year span ranging from the beginning of 2007 to the end of 2010, Walt Disney’s closest competitor was News Corp. News Corp’s respective revenues from 2007 to 2010 were $28.655 billion, $32.996 billion, $30.423 billion, and $32.778 billion.

While Time Warner dominated in terms of revenue from 2005-2008 (bringing in over $40 billion each year), they took a turn for the worse during the recession. From 2008-2009, Time Warner’s revenue nearly cut itself if half, dropping from $46.984 billion to $25.785 billion. Like other companies in the industry, Time Warner was able to bounce back in 2010, increasing its revenue by $1 billion.

Going across the Pond and Beyond

In Medias Res was asked Do players in your industry manufacture overseas?

We chuckled significantly over this question because we can hardly remember when the media industry went global. It seems so long ago that it’s hard for me to picture a time when this wasn’t the case.

A lot of key players manufacture overseas and have divisions and branches in different continents. It is an especially smart move in the media industry, because to intrigue an audience, content must be relevant to them, and “giving the people what they want” is more easily done when you understand the culture and values of your audience. Therefore, it’s really essential to be setting up shop overseas in the media industry.

Let’s think about News Corp. Its net money flow currently is $17.84 million and that’s not too shabby. It’s in the top five of the global media giants. And News Corporation is careful to cover all its bases globally.

You may have heard that BBC (British Broadcasting Company) is the “largest broadcaster,” but News Corp has extended itself into more mediums and done so on a larger scale. For example, News Corp’s UK division, News International, prints many newspapers like Today and The London Paper. News Corp Europe television broadcasts specifically in certain countries- like Romania and Bulgaria. News Limited, which we could consider to be the Australian brand of News Corp, has great outreach too, offering many magazines and television shows.

Equally important in manufacturing overseas are the translations that are necessary for offering products overseas in the media business. TV shows are translated- in some cases, like cartoons, even dubbed over. Magazines and newspapers are reprinted- and it’s not as easy as “copy & paste”-ing everything into “Google translate.” News Corp owns the publishing house, HarperCollins, and while it is headquartered in New York, translating novels and published works is essential and a big part of manufacturing internationally. And it’s not just News Corp. Many do it, just to keep up with the global audience. Manufacturing overseas is part of the global aspect of this industry.

Foreign Media Giant

While most large corporations in the media industry are all US based, there are some that are some large foreign corporations. Bertelsmann AG, the largest non US media giant, is a perfect example of this. This shows that the company operates in 63 countries and employs more than 100,000 people. With operation in every form of media, Bertelsmann AG is extremely powerful. With Random House, it is the world’s biggest publisher in books and publishes magazines all across Europe, including the magazines Femme and Prima. They also own tons of TV and radio stations across the world.

Oversea Key Media Industry Players

There are a few key players in the media industry that are not from the United States. One of the major new companies in Britain is the British Broadcasting Company. According to their website, BBC is “the largest broadcasting organization in the world.” Setting up their headquarters in the center of Britain, London England and staffing more than 23,000 people, it deserves the title of largest broadcasting organization. BBC is a public service broadcaster that reaches 10 national radio stations and 40 local radio stations with a website accessible to all. BBC provides their customers with” news and information in 32 languages.” BBC is run under the Royal Charter, which is “an accompanying agreement that recognizes its editorial independence and sets out its public obligations in detail.” In other words, it is a letter from the monarchy that grants the power to an individual or business. With international business becoming more popular, BBC surely has made goals to keep their status as largest broadcasting organization by sticking with quality, focus, efficiency, and market impact.

I believe it is important for companies in the media industry to be non-US owned, especially news companies. It is important for the world to know each others news and to care for one and other. That is what BBC is aiming to do. By broadcasting in 32 different languages, and being located in the center of the world, British Broadcasting Company is making the effort to get citizens of other countries to care for those in need. For example when Haiti had their earthquake, not only did the United States give money to help the country, but the United Kingdom, Sweden, and many others gave as well. Please refer to the table according to The Guardian. International business is becoming more important in our everyday lives, especially with companies like BBC in the news.

Key Factors to Global Success of the Walt Disney Company

Of all the companies in the media industry, the one that seems to be of the most globally successful is The Walt Disney Company. It had expanded into almost all countries worldwide from the U.S. to Indochina. The company received revenue of 38.1 billion dollars this year. Key reasons for its tremendous success are summarized to six major ones.

The most creative of these reasons is that the company has an international expansion strategy in which includes fixed assets. There are Disneylands around Paris, Hong Kong, California and Florida, Disney Resorts in Shanghai, Tokyo and Hawaii, Disney Cruise Line, Disney Vacation Club and Disney Card Club. They try to create a two-way communication by developing these clubs and parks. All which allow international and global involvement.

It had not only expanded to almost every country in the world, but it also has expansion strategies in Japan, Europe, US, India, Latin America, Hong Kong, and Russia.

Brand image is very important to any media company and Walt Disney and his following CEOs made a great job in creating it. One major factor to start and boost this image is Mickey Mouse, the most recognized cartoon character in the world.

It is apparent that Disney flourishes in not only the TV industry, but in several other fields. It has diversified into travel, theatres, film production, live-action, publishing and radio. This has allowed it to further succeed and spread its brand name.

Another very smart tactic is the strategic alliances it created with companies worldwide “to help with producing branded consumer goods, as well as supplying its theme parks”. Its most current one is its alliance with Apple’s iTunes which sells Disney movies, programs and movies.

Last but not least, Disney offers internet options to its consumers in order to involve them as much as possible. Their website offers access to e-ticketing, products and information about them. These are available on their website, but they also have a blog (BlueSky) that provides more in-depth communication with consumers.

Google Ceases to Amaze

Google seems to be getting involved in everything these days. Google recently entered the social networking industry with Google+ and now it seems they will be entering the world of online music stores. Google is now entering competition with Apple and Amazon in a race to create services that combine retail sales and remote music storage. Google's cloud service, Music Beta, and Amazon's Cloud Player both let users store music online, but neither of them have licenses from all the music companies. Due to this, users must upload most of the music that they want stored on their system. Google, though, is talking to three major music companies, Vivendi SA's Universal Music Group, Sony Corp.'s Sony Music and Access Industries Inc.'s Warner Music Group. Music Beta currently allows people to upload up to 20,000 songs. Apple is at this moment leading the race with their recent release iCloud. However, Google's Music Beta is still in an invitation-only testing mode, so we can expect it to become much larger threat to Apple and Amazon.

Social Networking FTW

This week, In Medias Res was asked, “What is the competitive landscape of the media industry in the US?” and we will be answering this question specifically in terms of popular social networking sites, like Facebook and Twitter, as they have been utilized most by other businesses implementing social media as a tool to further themselves.

That's because even established companies (Google, Time Warner Inc., Disney, etc.) seem to be rethinking their business models to incorporate websites, mobile functions, and social networking sites in order to make their products more accessible.

But what is the social media medium doing to the competitive landscape exactly?

The company’s branding, or the way it gets is name out, is done through the outreach it has online. The top social networking companies are as follows:

Facebook (700 mil. monthly viewers)

Twitter (200 mil. monthly viewers)

LinkedIn (100 mil. monthly viewers)

MySpace (80.5 mil. monthly viewers)

Ning (60 mil. monthly viewers)

Google Plus+ (32 mil. monthly viewers)

The viewership alone should not be telling of the competitive landscape of social networking sites in the media industry. It also depends how these web sites are used by other companies- outside advertising being how a lot of them make money. According to USAToday, Facebook, specifically, stands out as a promoter of small businesses, making coupons, special offers, and more available to followers/users.

The newer of these social networks, Google Plus+, has tried to revolutionize social networking accessibility by having "friend circles" and allowing Google hangouts (or video chats) for large groups of people. As a user of both Facebook and Google Plus+, I find Google Plus+ to be more fun and creative to use. But ol' reliable (Facebook!) is what seems to draw me in- simply because it seems like everyone uses it! It's hard to compare social networking sites when Facebook and, as of late, Twitter seem to be much more mainstream than the rest.

While Facebook is used by a lot of small businesses, Twitter is being utilized by some very smart companies, too. The online retailer, Zappos, and Comcast are using Twitter to further public relations and advertise their company.

When you get down to it, these popular social networks offer many different things: LinkedIn, specifically, serves as a way to distribute your resume to potential employers. All these unique groups come with downsides to them too: MySpace has a lot of spam and an outdated look to what used to be a site meant for artists to share their work and music; Facebook used to spam their users' in-boxes and many people are dissatisfied with the changing formats; Google Plus+ is very exclusive and you can't make an account without being invited by a current user. As for Ning, and other popular social networking sites like Hi-5, -they simply have not established themselves enough to make as much of a mark as Facebook and Twitter.

It would be interesting to fast-forward 5 years and see what we're still into. I don't know if Facebook will stay on top- or if a completely different player will take us by storm. So far, the competitive landscape of the media industry- as far as social media goes, is such that it is dominated by Facebook and Twitter, with some other competitors fighting for third place.

Apple's Steve Jobs Died

The biggest news in the history of modern technology has come out the past week: Apple’s Steve Jobs died at the age of 56. His death will not only affect Apple as a company but also the media industry as a whole.

There are short-term and long-term effects resulting from Steve Job’s death. Some of these effects will be discussed through this blog post.

The death of a legendary creator is most of the times an advantage to the sales of his creations. This can be applied in any field/industry. Let’s take the music industry for example. The death of the king of pop, Michael Jackson, resulted in a boom in his songs and album sales. The same thing is expected to happen to Steve Job’s iCreations and specially his latest iPhone 4S. People would want to grab the opportunity of owning a device that was created by a legend-to-be.

This affects other competitors in the media industry. Some might have an HP and plan to keep it for another year and then get a new one. But with the Macbooks running out and out of date (with time), they will rush into buying a Macbook Air instead. This influences the sales of HP PCs and other complements such as Windows XP.

Some are suspecting the company’s ongoing success in the long run. At some point, Steve’s modern designs will become old and so Apple is under the pressure of following in his footsteps of creating newer and more unique devices. “In 1985, the company began a steady decline that saw it drift to the margins of the computer industry” all because Steve Jobs was fired. It was only when he came back to the company that it started to rise again in 1997. That being said, some believe that the exact thing will happen to Apple’s sales today.

If this is proves to be true, it will be an advantage to other PC companies and their complements as their devices will rise in demand and therefore have their years of prosperity.

Pandora takes over the car industry

Trends in the media market are surely growing for a more technological age. According to IBIS, some of the top consumer trends are companies teaming up together to create better products, 3D technology, and a last growing trend is connectivity. A company like Pandora, an online music source that allows you to create playlists based on genre, artist, or song, is teaming up with car companies such as, Ford, BMW, and Toyota. According to Pandora’s help website, Pandora, Ford, and Microsoft have worked on technology called SYNC ® that allows customers to use hands free technology with their smartphone to play their Pandora playlists and control them with the vehicles controls.

This is extremely helpful, especially to the music sector of the media industry. Pandora is a company that selects songs based on your personal liking. I think that Pandora is a growing figure in the music industry personally. It is also a free website, which is cheaper than iTunes, paying $1.29 per song. However, there are some down sides to Pandora. You cannot choose your own songs to play; they randomly choose songs based on your artist, song or genre you pick to listen to. This could also be an advantage because it opens you up to new songs and artists. I also think it is smart for Pandora to be moving into the car industry. I wouldn’t mind taking my Pandora list on the go.

Differentiation Between Facebook and Google+

Different media companies are like any other company in that they are always fighting to differentiate themselves from their competitors. Companies want to detract as many consumers from their competitors as possible. This is done through differentiation. A current important struggle between two media companies is occurring when Google launched its Google+ to directly compete with Facebook. I will be focusing on the difference between Facebook and Google+ as opposed to Google as a whole. This article gives a good idea of the differences.

For the social media world, companies try to differentiate themselves in a number of ways such features unique to a company or number of users. Examples of ways that they differentiate themselves is that Facebook has hundreds of millions of users and google+ has many new features that Facebook does not. One of the key features that Google+ has is that it lets users create groups among their friends to create privacy. This is different from Facebook where everything you post is visible to all your friends. While Google+ is still in its experimenting phase, we can see it as being major competition in the near and long term future.

Pricing Trends in Media

The book Entertainment Industry Economics: A Guide for Financial Analysis by Harold L. Vogel provides great insight into how the entertainment industry works. Starting on page 292, the book gives an analysis of how pricing works when comes to advertising. When it comes to communicating with potential customers, perhaps the most efficient means is through advertisements. As one would expect, pricing for TV spots can vary depending on where a business is trying to receive airtime. While some prices can be found through research, many of the transactions between businesses and local stations have unpublished prices. The price for an ad spot can depend on multiple concepts. Broadcasters usually sell air time to businesses using the concepts of gross rating points (the sum of all the ratings figures), frequency (the number of times an ad is used), and reach (the number of households exposed to the message). Advertisers assess the expenses of delivering a message on the basis of cost per thousand households (CPM), which indicates how much half a minute will cost during a specific time of the day. The image above shows, the CPM trends for network TV compared to newspapers over the past 30 years.

Media Mission Statements

What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal about them?

A mission statement is a formal document that states the objectives of a company or organization. Within the media industry many companies have interesting mission statements.

Walt Disney’s mission statement is, “to be one of the world’s leading producers and providers of entertainment and information.” Walt Disney has definitely held up to their reputation of wanting to be the “world’s largest producers of entertainment and information.” Whenever I think of movies I think of Disney. Just last night I watched Tangled, a new Disney animation.

The McGraw-Hill Companies also in the media industry has an interesting mission statement. “We are dedicated to creating a workplace that respects and values people from diverse backgrounds and enables all employees to do their best work. It is an inclusive environment where the unique combination of talents, experiences, and perspectives of each employee makes our business success possible. Respecting the individual means ensuring that the workplace is free of discrimination and harassment. Our commitment to equal employment and diversity is a global one as we serve customers and employ people around the world. We see it as a business imperative that is essential to thriving in a competitive global marketplace.” I think McGraw-Hill’s mission statement is a great mission statement, because it doesn’t care if they are number one in the industry, they care more about their employees.

Netflix representing the movie portion of the media industry has a short and sweet mission statement. “Our appeal and success are built on providing the most expansive selection of DVDs; an easy way to choose movies; and fast, free delivery.” I own a Netflix account and don’t know what I did before without one. It is very convenient to not have to go outside my house to get a movie that I want to watch. I can either pull it up on the instant queue, or I can order it and have it come in the mail. Netflix’s mission statement mimics Walt Disney’s. They want to be the best in their industry and believe they are.

Lastly, I will focus on the radio part of media with SIRIUS Satellite Radio. “SIRIUS is changing the way America listens to music, sports, news, and entertainment.” SIRIUS mimics that of Netflix with a short and sweet mission statement, but it also mimics that of McGraw-Hill. Although it doesn’t have to do much with its employees, it has more to do with the customers, which is where media is headed these days. Pleasing the customer is the most important for any business who want to rule the media world. SIRIUS Satellite Radio is playing it smart by coming up with a mission statement that targets consumers of their product.

Scandal of the Year

The media industry has a long history of ethics scandals over the years. This article from the Economist talks about the highly covered hacking scandal in England by News International’s tabloid, News of the World. While tabloids have always been known for using questionable methods to gather information and come up with good headlines, News of the World took this way too far. In possibly the worst ethics scandal of the year, News of the World was revealed to have hacked the phones of possibly thousands of victims. While it had already confessed to hacking a number of celebrities and politicians, when it was revealed that they hacked into the phone of a teenage murder victim, it sparked public outcry. The scandal was not limited to the hacking of phones and also included the bribery of police officers for information and was accused of possible interference in the police investigation after they deleted messages from the dead girl’s phone. It also became known that they had also been hacking into the phones of soldiers deployed in Afghanistan and victims of terrorist attacks as well.

This scandal would lead to the end of News of the World, despite it being one of the top selling tabloids in the country. It would also harm the reputation of Rupurt Murdoch, one of the most powerful and wealthiest men in the world. He owns many news corporation worldwide, including Fox, the Wall Street Journal, and NewsCorp, which the FBI is investigating.

Netflix, Are You Serious!?

Perhaps no other company in the media industry is receiving for attention at this moment than Netflix. 2 months ago, Netflix announced that they would be changing their price, resulting in outrage among numerous customers. Fast-forward two months and the price change has resulted in the loss of many subscribers. Just when current customers thought they couldn’t get any angrier, things got a lot worse. Netflix CEO Reed Hastings recently sent out an overnight email to the company’s 23 million subscribers, notifying them of Netflix’s plan to separate its movie services.

Hastings plans to rename the DVD business from Netflix to Qwikster. Qwikster will have its own billing system, website, and list of movies. Current customers are infuriated by this move. Stating how now they will not only have to play a lot more, but they will also have to access to different sources. Angry customers are even threatening to cancel their Netflix subscriptions, arguing that the selection of titles available for streaming is very limited compared to the DVDs.

In my opinion, things are not looking so great for Netflix’s future. Not only are their fans becoming infuriated, but there is also an increasing amount of movies and videos becoming available throughout the Internet. Netflix’s shares have already dropped 7.3% on Monday according to the Nasdaq Stock Market. Hastings says he is willing to endure through the downfall because his long-term belief is that people will become less dependable on DVDs and eventually streaming will take over and make DVDs obsolete. While Hastings remains confident and envisions a successful future, I for one would not recommend investing in Netflix for a while.

-Nayef Halloun

Ethical Issues in Media

The media industry with its various branching industries faces a good chunk of ethical issues. The advertising industry itself brings most of these issues. And then we have the social media companies such as Facebook which are also the most controversial. Other sub-industries of media raise some ethical issues but are not as influential. In my opinion, the publishing industries are the least controversial if not at all.

One of the most controversial ethical issues in the advertisement industry is the use of sexual imagery in some ads –a term referred to as “sex sells”. Many people consider this tactic unethical and misleading. For example, Apple –one of the most successful/popular company selling electronic products– uses a shadow of a naked woman and a playboy-bunny earpiece wire as a marketing strategy to attract more customers to buy their products. This may be considered offensive to parents who are concerned about their child seeing such images.

Another method advertisement companies often use carry discriminatory messages and may cause prejudice for some people. For example, many consider Fair & Lovely –a company selling skin clarity products – TV commercials racist. This is due to the fact that they assume that women are happier with lighter skin.

Operators of TV broadcasting sometimes display pornographic images or reality TV shows that portray a message that is supposed to be directed only for a certain audience of certain age. No parent would want their child watching 18+ rated movies for the sexual and psychological implications it causes. They would want to make sure that their child is having a healthy childhood. Reality shows mess with people’s minds the most. Since viewers think they’re “real”, their message is going to be the most influential. Therefore, reality show producers should be very careful when choosing their theme point –in which unfortunately they’re not. Shows like the Bachelor influence what people think of relationships and how men treat women and so on.

With social media comes a whole stack of issues related to ethics; from hacking to abusing to privacy concerns. Many facebook users deactivated their accounts due to other people stalking their profiles which gave them a sense of insecurity. You might think social media networks are harmless, but they cause levels of harm from simple such as losing your privacy to criminal such as child abuse, rape and murder. To illustrate, there’s a story that Oprah thought was of major importance where a 14-year-old child called Kristin was raped by a 27-yer-old man and then committed suicide all resulting from social networking dangers.

Most newspapers carry only ethical messages and are of highest ethical standards amongst other forms of

media. In fact, their only relation to ethical issues is discussing them and raising more awareness to prevent and/or reduce them.

It's (Still) Elmo's World!

In Medias Res readers are wondering: "Which companies in the industry stand out in regards to their view and actions in CSR?"

Corporate social responsibility (CSR) entails of being mindful about the community, the environment, and the world. However, in the media industry, it also includes actively promoting these ideals. The products of the media industry are such that they portray the values or lack of values of society, and many expect to see movies, websites, shows, newspapers and books to be in abundance of their own moral fiber. If the consumer does not agree with the products on that simple level, there is less of a chance that they will be interested in them. Granted, there are people who will pay attention to something like a TV show whether or not it's educational- I hate to tell this to you, writers of “Mad Men,” but no one I know watches the show for an in-depth look at businesses in the 60’s. It’s because of all the drama and intrigue that Don Draper’s (Jon Hamm) love life provides. But having that moral fiber helps, and it is in the media industry's favor to hold on to it. So motivation for promoting CSR is there. The question is... which companies actually care?

You can't walk into a bookstore without seeing a romance novel. And television and movies are riddled with "Rated R" programs. Clearly, some publishers and producers don't need to appeal to the public on the CSR level. On the other hand, private nonprofit names like PBS and NPR are dedicated to stimulating creativity and media literacy as well as upholding ideals like conservation and environmentalism. In PBS’s mission statement,they underline the importance of reaching out to children.

PBS online and PBSkids has churned out interactive and educational programs that are accessible to children of all ages. And it stands out for its innovation. Look at Sesame Street: That show adapts itself to the changing social climate with guest stars like Norah Jones and Katy Perry, while also teaching kids basic things about asking questions, learning to read, counting, etc. And let's face it: Elmo is "da bomb!"

It makes sense that companies with a target audience made up of children should have positive messages. Seven years ago, Nickelodeon had the "VERB" campaign, about getting active and being outside. More recently Disney Channel went green, promoting environmentalism in a huge campaign that involved stars like Miley Cyrus and the Jonas Brothers.

Disney works in different mediums of media-just like PBS. From Online games, to IMAX Movies, like “Planet Earth” and “African Cats,” to music releases and TV shows, Disney promotes the environment in a good way and sponsors contests for its viewers. By engaging its young viewers to get involved in projects to save the planet (recycling, community compost, etc.) Disney is making itself a big leader in the media industry as far as CSR goes.

More companies should take note of what PBS and Disney are doing. By actively reinforcing the moral fiber of society, its viewership is growing and people are paying attention because they are being made to care.

Social Media Use In Small Businesses

Keeping up with current events, social media is making starting up a new business easier than ever. An article in the Miami Herald shows that while most leading companies have already become accessible through social media, small businesses are just now seeing the potential. The most prominent new frontier opened up to small businesses with social media is advertising. Businesses can keep people up to date with upcoming promotional events and sales. Advertising in newspapers and on TV is extremely expensive, especially for small businesses. As a business gathers friends and followers on media sites, it becomes very efficient for businesses to advertise to this group of people. While most ads in other places would be useless for a majority of the people exposed, advertising to your followers saves money and targets people who would be most likely to respond.

With the use of social media sites by ordinary consumers constantly increasing, new and small businesses are given instant access to more views than ever before than if they had not gone to sites such as Facebook or Twitter.

Supply and Demand in the Media Market

In Medias Res was asked to discuss the supply and demand in the industry.

Dow Jones Industry Tracker - Media

Supply and Demand

Media is a big part of our daily lives. My family watches the daily news every morning and evening, as well as listening to music, using organizations such as Facebook and Twitter. But, we as a society also use media every second of every day. Almost everyone has a smart phone, where media can be stored and accessed twenty-four seven.

Media is a tricky industry to follow. It can have a good month or a bad one depending on the products sold. The graph above shows the Dow Jones Industry Tracker for Media for one year. Since October, the stock for media has been steadily rising. However, as you can see, mid-July and early August shows that there was a significant drop in the media industry. What caused this drop?

Media is a quick changing industry. In the words of Heidi Klum, “One day you’re in. The next day you’re out.” This quote holds true to any industry, media especially. Demand for media is getting higher and higher. And supply is as well. The producers are listening to customer input as well as predicting what the customers want in the future. Smart phones weren’t a huge demand. Yet, the producers still made the phones. Now, some people can’t live without their smart phones for more than one minute.

Society is now demanding more online or on-the-go products some of which include e-books, applications for smart phones, and new gaming systems. There is also quite a demand for music these days. i-Tunes isn’t the only cite you can download from. There are illegal ways to download as well as cites like Pandora where you can create your own play list, YouTube and Grooveshark are other examples as well. As long as media is ever changing, the supply and demand for media will be forever changing as well.

Let's Make Some Money

What are the basic economics of the industry? How do companies make money? What are their costs?

When it comes to media, revenue and costs come about in many different ways. In the constant quest for view counts, different media companies are constantly competing with each other to see who can attract the most viewers. Danny Brown, co-founder of Bonsai Marketing, explains it best in his article, "The Real Cost of Social Media." Companies in the media industry tend to make their revenue in several different ways. One method is through the application of user fees and subscriptions. Usually if you want access to the media, you will have to offer up some sort of payment. From newspapers, to magazines, to cable, to the Internet, viewers will have to pay an access fee. Another way companies involved in the media make money is through advertisements and sponsorships. Companies want people to know about their product/service and are willing to pay media outlets in order to achieve this. Now when it comes to costs, media companies are constantly going through high production costs. For companies involved in television, a major cost is paying for airtime. If they want to receive revenue, they need viewers, and it promotions can cost a hefty sum.

Lion King 3-D

Let's talk about some current developments: it's been a very busy and lucrative time in the media industry.

An article in the WSJ states that the 1994 movie, the Lion King was re-released in 3-D in movie theatres this week. Up until now, it had grossed 29.3 million dollars topping all other movies in the U.S. Box Office. This is a record in history as it added to the film’s lifetime gross on top of the $40.9 million it made on its opening weekend in 1994, the $765 million earning world-wide and the $19.4 million large-format reissue in 2002.

The idea of transforming a classical movie into 3-D was genius. The statistics in the article prove so as “92% of the weekend's gross came from 3-D ticket sales”. So we can see here, that the marketing media has a huge and evident effect on business.

The movie also had an effect on social media as it gave people something to talk about. According to twitcritics.com, 4140 tweeters mentioned the Lion King 3-D till 06:20 pm September 18, 2011.

It must have affected the publishing industry as well. The WSJ newspaper is writing about it and many other newspapers have it mentioned in their movie theatres page. Each newspaper company must have asked for some amount of money in exchange for a space in their paper. This further expands the flow of money.

Other than newspapers, operators of broadcasting and owners of television stations had to display the movie trailer. This means that they also got paid in exchange for the time period they spent showing the trailer as a form of advertising. The same applies to radio stations.

The movie’s tremendous success did not only affect Walt Disney Co. by earning a huge gross/profit, but it also affected the competing movie production companies by beating them on the box office and by affecting their revenue as well. If some had one opportunity to go to the movies for the weekend, they might choose to watch Lion King 3-D (a number one rated movie) instead of the Smurfs which ranked 15 on the box office.

Not to forget to mention that the movie itself “is largely a promotion for the debut of "The Lion King" in 3-D on Blu-ray disc next month” as mentioned in the article which means that the revenue will not stop here.