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Mass to Niche Media

Basic Drivers Toward New Equilibrium. TechnologyNew and More Immediate Production and Distribution ChannelsDrive Toward Unit Sales and New TechnologyDeregulationNew Competitors Permitted in MarketsGlobal Reach and ExpansionDrive Toward Syndication of Content ConceptsAppetite of Capital MarketsPushing Expansion Beyond Logic?at times .

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Mass to Niche Media

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    1. Mass to Niche Media

    2. Basic Drivers Toward New Equilibrium Technology New and More Immediate Production and Distribution Channels Drive Toward Unit Sales and New Technology Deregulation New Competitors Permitted in Markets Global Reach and Expansion Drive Toward Syndication of Content Concepts Appetite of Capital Markets Pushing Expansion Beyond Logic…at times

    3. Explosion of Consumer Options Result? Propagation of New Distribution Channels, but not more time nor advertiser pie – increased fragmentation of viewing audience and advertising dollars Consumer product dollars (esp. DVD’s) pressuring competitive windows, increasing the cost and risk of products Windows for low-end product to slide into diversified distribution channels Threat to lock of traditional distribution companies/”banks”/portfolios

    4. Consumer Good to Divisible, Editable Asset 1988 Sony buys CBS Records for $2 Bn 1992 Blockbuster starts expansion spree, as well as music retailers 1994 Blockbuster invests $1.25bn in Viacom, which then buys Blockbuster for $8.4bn 1996 CBS buys American Radio Systems for $2.6bn, owning 175 stations1988 Sony buys CBS Records for $2 Bn 1992 Blockbuster starts expansion spree, as well as music retailers 1994 Blockbuster invests $1.25bn in Viacom, which then buys Blockbuster for $8.4bn 1996 CBS buys American Radio Systems for $2.6bn, owning 175 stations

    5. Adoption in the Mass Market Tipping Point How does word of mouth really work? How do you influence large numbers of people? How do you influence the Right people? Depends on Influencers, Connectors, Experts

    6. “Economies of Scale” Advertising vs. subscription model

    7. Magazine Market General Circulation vs. Niche Subscription vs. Advertising Initially lose money Newsletters now can be Internet-distribution

    8. Top 25 U.S. Magazines – Paid Circulation

    9. Top 25 U.S. Magazines -- Advertising

    10. Who is Advertising in These Magazines?

    11. Who are They Really?

    12. Top 10 and the Niche Segments What do the 10 powerhouses have in common? And what does everyone else read? (See articles)

    13. Costs of Distribution Printing Distribution – physical, relationships DSI Cost of customer acquisition “Slotting fees”

    14. Changes in Advertising Marketplace

    15. Example – “Buying Women” Magazines Cable Lifetime Oxygen Internet

    16. Example – Buying Kids Disney – for Disney – cross-promotion, movies, music ToonDisney & Playhouse Disney – brand extensions Nickelodeon – movie sourcing Discovery Kids – NBC WB Kids + Cartoon Network – boys Noggin

    17. Migrating Males

    18. Where Have All the Young Men Gone? Disappearance of Young Males from Network TV Computer games 2003 – daily video game use up 22% M18-34 G4 Media – G4techTV Cable Sports ESPN up slightly

    19. Advertisers Concerned?

    20. Long Term Impact?

    21. Example – Scandal Sheets – going the other way Long history on radio and newspaper National Enquirer and Star, US Entertainment Tonight People Now syndicated on most major media

    22. Example – Big Ticket News Network News – Big 3 – expensive infrastructure Merging of news companies in long discussion Local News – “Sweeps week” sensationalism; low cost AP/ “UPI”/ Reuters CNN – loss leader for Turner Broadcasting CSPAN / Bloomberg – niche markets MSNBC – Internet Bridge between MSN & NBC

    23. Niche News Fox News – sold along with Men’s Channels Initial loss leader Niche news G4 gaming news E! SportsCenter Internet – further niches The Onion Slate “zero” cost distribution

    24. Music -- Cable MTV – initial loss-leader by Viacom International launches Major influencer of music purchase in US Minimal cost of programming – videos provided Shifted to reality and series VH1 Fuse Much Music DMX

    25. Top Cable Networks by Ratings 49% of HUT; 81% of cable households49% of HUT; 81% of cable households

    26. Top Cable Networks by Revenue 49% of HUT; 81% of cable households49% of HUT; 81% of cable households

    27. Reaching the US TV Consumer

    28. Fragmented Competition: Number of US Cable & Satellite Channels

    29. US Channels Available Doesn’t Materially Impact 14-19 Channels Watched

    30. Network Concentrated Landscape

    31. Defensive Strategies in Niche Markets Niche – adjacent niches – pre-empt competition Buyers’ Power – aggregate to match up E.g. Fox – Men’s channels Radio – Clear Channel – surrounding the formats

    32. Music -- Radio Traditional Radio – limited stations -- Closed loop – “own” format families XM & Sirius (NFL & NHL on Sirius…sports expanse)

    33. Local AND National Central programming of niche – Bakersfield from New York New “Local Media” Computerization of local content – bringing info back

    34. Search Engines Mass Market with Customization – Niche Yahoo – ability to customize ads Communities & message boards – portal stickiness

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