Google's Feeling Lucky

Question:

What are some current events in your industry? What is the impact of these events on the industry?

Articles in this blog post:

“Google Ponders Pay-TV business”

Article Summary:

As television distributors face competition from internet streaming and other major corporations in the industry, they now have to face a new threat: Google. Amidst the development of dozens of online YouTube channels and Google TV, software for televisions which lets both the internet and television channels be searched easily, Google has begun considering making its own cable services.

While not officially announced or commented on by Google, the evidence is piling up. There have been exploratory discussions with Disney and other content providers about distributing content from their channels, along with the recent hiring of Jeremy Stern, an executive from cable television, which indicate a desire to move into the television market. While more details have yet to be seen, many analysts think that a large company like Google or Apple will eventually make the jump into providing online service.

Analysis:

Google definitely has the potential to become an immediate threat to the media industry. While Netflix, Amazon, and Hulu have all trailblazed the streaming industry, Google has significantly more assets and has grown vertically and horizontally at a tremendous rate. Given the introduction of Google TV and the concept of making channels for viewing YouTube, it seems like Google has already made the first steps into the media distributor industry. As the article states, there’s also an incredibly large market at stake – subscriptions and advertisements for television produce $150 billion in revenue, and with the growing strength of both Google and the Internet a transition into media distribution would be welcomed by consumers.

Google has to be careful of moving too quickly. Netflix has lost respect for changing the prices of their service, along with attempting to grow too quickly – it would be incredibly easy for Google to become overly-ambitious and lose potential. Still, as of present Google’s presence strikes a fear in the current distributors due to the immense size of their possible competitor.

Innovation in Media

Question: In what areas of the industry are there opportunities for innovation?

Summary: According to an article on Comcast's website, "[Apple] Apps have opened up an entirely new world of possibility in nearly every industry, and the app revolution is poised to be a game-changer in the evolution of television." This is one example of how media providers have adapted to the technological climate and invented new ways of selling their services and products to consumers. Comcast has developed an Xfinity App that is compatible with the iPad and iPhone which creates another source of revenue for Comcast and the beginning of something new: cable subscriptions on your mobile device.

Analysis: This innovation is just one example of how companies adapt their products/services to haul in new customers and further satisfy old ones. The complicated and interesting thing about the media industry is that technology is constantly changing and improving which means that providers and distributors specifically must be in tune to what is going on, what customers will want next, and prematurely fill those needs. This just one way that competitors in the media distribution industry can stay ahead of the game: innovation.

Source: http://blog.comcast.com/2010/11/xfinity-tv-news-comcast-demos-ipad-app-at-web-20.html

Burst Media Launches Online Channels

Question: What are some current events in your industry? What is the impact of these events on the industry?

Summary: Burst Media, an online media company, is launching a series of online video channels offering a variety of programming. This is an expansion into online TV, which Senior Vice President Jessica McGranenhan claims "has become a vital, integral part of online media consumption." These video channels will be incorporated onto other online publisher's website, such as fashiononerouge.com's use of the fashion channel on their website. These channels will consist of independent content, since this is what Burst is built around - indie media.

Analysis: Entrepreneurship consists of innovating, finding new markets, and offering new products. Online businesses have been the single biggest source of entrepreneurship over the last 15 years, with the exception of computer technologies. Facebook, twitter, amazon, and host of other websites have redefined our society. Online media has been quickly displacing more traditional media. Netflix has slowly but surely made itself into one of the most prominent movie distributors through its online service. The entire move towards online distribution of video is an important part of the recent media revolution. Hulu only recently began to crack open that opportunity, and increased levels of it, as well as new content, will strengthen the market as a whole.
Additonally, indie media is a very important part of entrepreneurship, and offering indie television over the internet is not only a way of expanding the online media market, but it can bring a whole new market to independent media, the same way social networking gave a whole new level of depth to independent bands.

http://www.marketwatch.com/story/burst-media-launches-video-channels-to-enhance-and-complement-publisher-content-2011-11-02

Entrepreneurs Festival - Tech City, London - 2011

Question: What are some current events in your industry? What is the impact of these events on the industry?

Summary: "Held from November 14-19, Entrepreneurs Festival will bring together more than 300 of the best and brightest entrepreneurs from across Europe to meet, train and pitch to the top mentors, entrepreneurs and investors from the UK, USA and Europe." This event is a part of London's Global Enrpreneurship Week, that is supposed to help young tech and digital companies to accelerate their start-up phase through a week of training sessions with the industry's most successful leaders.

Analysis: Technological innovations are essential for media industry, thus anything that helps tech and digital companies speed up the creation of something "the world has never seen before" would (although not directly, but) inversely help the media industry grow. In this case, one of the main goals of the Festival is to help these new tech and digital companies "learn how to sell to and partner with some of the biggest tech buyers and businesses." As of today, one of the biggest tech buyers is media industry, or the media industry players (e.g. telecommunications). Also, amongst those who will be attending this event will be "international tech and start-up entrepreneurs from the games, digital, web and mobile industries" and those entrepreneurs will be looking for the new products that the new emerging companies have to offer. So if someone from the games or web industry will partner up with a new entrepreneurial genius who came up with something from which the industry will benefit, the media industry will benefit from it too (since games and web are part of media industry, there's no way that it won't benefit from their success).

Sources: http://chinwag.com/events/2011/11/entrepreneurs-festival-tech-city-london-2011

Entrepreneurs bring entrepreMORE

Articles in this Blog Post:

“Pay TV industry loses record number of subscribers”

“A Bleak Picture for TV Makers”

Question: How has the competitive landscape changed as a result of leading entrepreneurs in the industry?

Article Summary: Recently, distributors of cable and satellite have been facing a new problem – more and more people are canceling their television subscriptions. While this decrease in customers was small last year, the numbers now are growing, causing a change in competitive landscape. The Associated Press reported that in the course of three months, April to June, distributors lost almost 200,000 subscribers, a 0.2% loss from the total.

Where are all the subscribers going? Due to the poor economy, evidence shows that many consumers have shifted to leading entrepreneurs that offer Internet distribution services at a cheaper price. Netflix and Hulu have many of the same popular shows that the rest of the distributors have, but with no installation, fewer advertisements, and more portability with the growing use of laptops. In an effort to make more of a profit, the content providers like Newscorp demanding higher fees to the online subscribers and instating a week delay on shows for those who use Hulu but do not pay for the expanded Hulu Plus features.

In addition, the markers of physical television systems have suffered a great hit, and companies are manufacturing TVs with Internet connectivity to combat the losses. Sharp Corp. will introduce a new model with “4K” technology, which is four times more detailed than standard HD, which will presumably bring more change to the industry as providers take advantage of the new technology. Bottom-line: entrepreneurs in the form of online streaming are bringing a hit to the rest of the media industry, which makes other distributors struggle, leads content providers to demand higher fees, and physical television producers to introduce new changes of their own.

My Analysis: There’s no doubt that online streaming has influenced changes in the media industry. While the first article mentions how some big companies are not yet acknowledging the threat of online streaming, a product that costs only about $8 instead of the more expensive cable and satellite is incredibly attractive, especially with the recent recession taking most people’s wages.

The entrepreneurs have changed the stage to bring changes in physical televisions, which have much potential to bring even more innovation. Obviously, with internet-connected televisions, more user interactivity and control is brought to the action of watching TV. The 4K televisions, which are four times more powerful than standard HD ones, will also probably spark more competition in the industry – cable and satellite companies are still competing over which has the most and best HD channels.

But the powers of these new entrepreneurs should not be over-exaggerated. In the United States there are about 83 million subscribers to television producers, so a loss of 200 thousand is hardly crippling. Additionally, with Netflix currently in a period of decline and the runner-up Hulu being significantly smaller, the entrepreneurs are still going to need much more innovation to stand amongst the giants without getting squashed.

Emerging Media Companies

Netflix, Amazon Unveil Deals for Disney-ABC Streaming Content

Question: Who are the emerging companies?

Summary:

Netflix and Amazon have both entered into a deal with Walt Disney Co. that will allow them to offer streaming of ABC and Disney Channel shows. These deals show the increasing importance of being able to offer online streaming for media companies. These deals, however, are not only important to the service providers - content owners are seeing a decrease in revenues from other sources.

Amazon has shown itself to be a real competitor for Netflix, having added more than 11,000 titles this year. In addition to increasing their content, Netflix has the added pressure of expanding their market. They will be moving into U.K. and Ireland, and are expecting some loss in parts of 2012.

A market analyst that covers Netflix for Janney Capital Markets, says that content companies are profiting from the current market, since they can sell their content to numerous distributors.

See article for a brief comparison of the financial states of both companies.

Analysis:

While there are few true entrepreneurs in the service providers section of media, there are a few companies that are changing the traditional approach to media through innovation. Netflix is the most obvious of them. It popularized the idea of streaming both movies and TV shows online, instead of watching them through traditional providers. Hulu, though neither mentioned in the article nor a public company, is a competitor of Netflix, offering a very similar streaming service, though at the moment its content is significantly weaker. Perhaps if it decides to go public at some point, it will be able to get the necessary capital to negotiate the deals that other companies are making.

Amazon is a very well established company, but it is a fairly new to streaming. However, it has a very large customer base and makes it easy for its customers to start using its streaming service. This deal shows that it is dedicated to entering this market and can become serious competition for Netflix.

"Paranormal Activity 3" Scares up Huge $54M Debut

Question: What are some current events in your industry? What is the impact of these events on the industry?

Summary: "LOS ANGELES (AP) — 'Paranormal Activity 3' didn't just go bump in the night. It made a ton of noise at the box office with a record-setting, $54 million opening.The third film in Paramount Pictures' low-budget fright franchise, which was No. 1 at the box office, had the biggest debut ever for a horror movie, according to Sunday studio estimates. It broke the previous record part two set a year ago with $40.7 million. It's also the biggest opening ever for an October release, topping the $50.35 million Paramount's "Jackass 3D" made last year." According to this article and Don Harris - Paramount's president of distribution - the third movie was the best out of all three, and that is why "this installment did so well."

Analysis: Obviously Paramount has profited from this movie, but besides Paramount the movie theatres did as well. With so many people coming in, imagine how much soda, popcorn and snacks were sold that day. Companies like Blockbuster, Netflix and Hulu are going to make some profit of that film, when it's going to come out on DVD. Newspapers and Magazines are going to profit from that movie because they're publishing movie reviews and different articles about Paranormal Activity 3 and that's what people want to read about "today"; so possibly more people are going to buy newspapers and magazines that contain at least some info about the movie in the following week or two, than they used to before. So overall, I think we can say that the success of the movie 'Paranormal Activity 3' has (or will have) a great impact on the media industry in the future, possibly even near future.

Sources: http://movies.yahoo.com/news/paranormal-activity-3-scares-huge-54m-debut-154505711.html